Faym Bappi is the co-founder and CEO of HypeScout, Bangladesh’s first influencer marketing platform that is now plotting to go regional. Before starting HypeScout, Faym worked at Pathao, one of the early Bangladeshi startups to receive global attention, where he worked at the intersection of marketing and technology. Trained in computer science, Faym always wanted to build his own thing, a passion that eventually led him to start HypeScout.
While influencer marketing is relatively new to Bangladesh, it is a fast-growing phenomenon across markets. Many industry insiders predict that influencer marketing is going to be an important part of the future of digital marketing. It makes sense.
I recently had an opportunity to speak with Faym about all things HypeScout, influencer marketing, and startups. We talk about his startup journey, how HypeScout came into being, what the early days of HypeScout were like, and what the first version of HypeScout was like, we discuss the state of HypeScout’s business today, strategic direction, and future plans, we delve into the influencer marketing and the future of influencer marketing, and we reflect on the challenges and rewards of being a founder and his lessons from his journey so far. What follows is a lightly edited transcript of our conversation. I had an excellent time speaking with Faym. I hope you enjoy reading the as much as I enjoyed doing it. Thanks to Ayrin Saleha Ria for helping me edit this interview. Happy building!
Ruhul Kader: Thank you for agreeing to this interview. Can you please briefly introduce yourself and what you are working on?
Faym Bappi: Thank you for having me. By training, I’m a computer science graduate from Daffodil International University. I started working at Pathao in 2016 when I was a second-year undergrad student.
I worked at Pathao in the marketing department, digital marketing in particular, for almost five years. We built many processes to automate things between product and marketing. For instance, Pathao used to send these push notifications. Initially, we were using third-party software to send out those notifications, which was expensive. We then decided to build our push notification system to reduce the costs.
One of my roles at Pathao was automating manual processes, particularly in marketing, through technology. Since I came from a computer science background, working at the intersection of tech and marketing was interesting for me. I put all my expertise and efforts to work and learned tremendously about tech and marketing and what is possible at the intersection of the two.
I always wanted to build something that could help people at scale. That’s part of the motivation behind starting HypeScout. I first came across the idea of HypeScout in 2020. The Pandemic had already started. Many people were losing their jobs. Companies were going through major layoffs and salary cuts. I had to go through a salary cut as well. I was looking for ideas to explore. That's when the idea of an influencer marketing platform came to my mind.
Before that, I didn't know that something like that existed, especially in the South Asia region. I shared the idea with a couple of my friends, and then we started building it. Eventually, we got funded, and we started the journey. That's about how HypeScout started its journey.
My understanding is that anybody can be an influencer. Everyone can influence some people. For instance, I come from a tech and marketing background. I have a community of my own, whatever small that community is. I can promote relevant things to that community. If I come across an excellent course on marketing, I can post it on Facebook with a small description of how great the course is and so on. Now, some of the people who follow me and trust my judgment will check the course out. Some of them may even purchase the course. You promote a particular product/service to the people you know or to people who follow you online by writing/posting about that product. In return, you earn money from the brands. That's the basic idea of influencer marketing.
Anyone can be an influencer. And anyone can join HypeScout as an influencer as long as they have a minimum of 1000 followers on a social media network. If you have 1000 followers on Instagram you can join us as an influencer. We are not talking solely about the mega influencers. We put equal importance on what is now called nano and micro-influencers. We're the first to popularize this concept in Bangladesh.
While at Pathao, I had the experience of working with micro-influencers. We used to work with hundreds of micro-influencers every month. Managing the whole thing was difficult. It was mostly manually managed and used to take us a lot of time. That's when I thought there should be a platform that could automate the whole tedious process, save time, and help me with data and ROI. In many ways, HypeScout is solving the problem that I faced when I was at Pathao.
Ruhul Kader: That’s interesting. You started thinking about the platform in mid-2020 amid the coronavirus pandemic. I want to ask you a few things about those early days. One, can you briefly talk about when you started building the products, about the initial couple of months, the resources you needed, and how you put together those resources? Second, what was the initial product that you launched in the market?
Faym Bappi: The idea came in mid-2020. Somewhere in July 2020, I started working on this idea with my friend Mushfiq. We both started building the first version of the product. We didn't have an office. So we used to meet up in coffee shops and work.
Ruhul Kader: Did you leave your job at this point?
Faym Bappi: I did not. I was still working at Pathao. I was funding my project with my salary. I used to spend it on server costs, subscriptions that we needed and paying coffee bills. We were bootstrapping and I was the one funding the whole project. After working for almost three months, we built a minimum viable product (MVP). It had some capabilities but much much less in scale and capabilities than what we have now. For instance, we could only onboard influencers from Instagram at that time. Now we have Facebook, Youtube, and TikTok as well. But initially, we had only Instagram on our platform.
Once we had the initial platform ready, we hired about 50 micro-influencers and convinced a couple of brands to test out the platform, mostly through my network and referrals. These brands launched a couple of campaigns on the platform and from that, we figured out whether there was any issue in the platform where we can improve.
While we were beta testing the platform, I also applied to an incubator program run by the North South University called NSU SN. It was the first incubator program by North South University. And we got selected. We were one of the four teams selected for the program. The program was very helpful. We received important guidance and a network of angel investors. We also received a grant of almost $5,000. We invested the grant money to invest in growth and cover operational expenses.
We also started doing influencer marketing for ourselves. We thought if we are asking other brands to use influencer marketing to promote their brands, we should be able to leverage the same technique for ourselves. something like testing your own medicine. We tried influencer marketing for us and it worked. We didn't have to spend much on marketing.
That's how it started. In January 2021, I left my job. In February 2021, we received our first investment, approximately $50,000 as a pre-seed round from three angels.
Ruhul Kader: Can you elaborate on your thesis a bit? What was/is the problem that you're trying to solve? How do you see that fit into the broader market landscape and all those things? You mentioned an interesting idea that anybody can become an influencer. Everyone has some power over some people. So please tell us about these things.
Faym Bappi: Five years ago, global influencer marketing was just a $1.6 billion market. In the last five years, it has grown to become a $16 billion market. It has been growing at 32% year on year. If that growth rate sustains, it will be a $140 billion market by the end of 2030.
We see the market potential, and it is booming. A lot of people don’t know about influencer marketing even today. That’s also an opportunity. The more people know about and learn about it, the market will grow. Initially, few people knew how to run ads on Facebook and Google, today, ads mean digital ads. Everyone can run ads on their own. The system has become so easy. It doesn't matter if they're big corporations, startups or SMEs, or ecommerce companies, it doesn't matter. So we think these new trends will go mainstream as well.
What we are seeing, there is a shift coming to social media ads. For example, people are increasingly talking about privacy. Apple and Facebook are having a big war over privacy users. Google is also on the way. Going forward, advertising techniques that use user data and display the ads to them may come under serious challenges.
But if you think about it, influencer marketing is an entirely different way of looking into communication. You cannot put a restriction on influencer marketing. Because it's just a social media profile and people can post whatever they like. People these days use ad blockers to block ads on YouTube. These changes are going to transform advertising as we know it.
But marketers and brands will need ways to promote their brands. We think one of the dominant ways will be influencer marketing. That's about our thesis. That's what the market says.
We think influencer marketing has tremendous potential going forward.
Ruhul Kader: One more question about the early days. How did you convince your initial customers and investors? You built a platform, started testing the platform with the initial beta testers, particularly influencers and the brands, and then applied for the NSU SN accelerator program and then you raised $50,000 as a pre-seed. Influencer marketing is a relatively new concept, not only in Bangladesh but in many other markets in the region. What was your pitch to all of these people? How did you convince them? What were you exactly selling to these people? If you could touch a little bit about how did you convince these people.
Faym Bappi: We had a couple of unique selling propositions (USPs) from early on. One, you could hire micro and nano influencers. If you don't have a big budget to hire an influencer, like Salman Muktadir or Rafsan the Chuto bhai, who can be quite expensive it is fine, you can hire smaller influencers, which is also equally effective.
Some brands don’t have that much money. Some brands don't have a one lakh taka budget for their whole marketing let alone only influencer marketing. That's where the idea of micro and nano influencers clicked.
We used to go to the brands and say, hey, look, you're trying to hire these mega influencers and spend approximately one to two lakhs taka for one single post. But what if I say you could hire 200 people with 500 taka each, and you would get 200 unique contents that you could eventually promote across your social media pages? And it is super inexpensive.
Think about it, for one lakh taka, you are getting 200 pieces of content and 200 people who are saying good things about your brand on social media. Think about the impact that it will have. Think about what would happen if 200 people use the same hashtag and people would see all these 200 saying the same thing about a product, it would create some virality. It would lead to more posts from other people for free. And suddenly you are trending and so on. That was what we were selling to our initial clients.
Ruhul Kader: What kind of discussion did you have with your early investors in those days?
Faym Bappi: From an investor’s perspective, it was something interesting. The local investors that we have, many of them weren’t aware of the influencer marketing trend. When they saw our product, the first thought they had was how their portfolio companies could use this platform. Because they already knew that their portfolio companies were having trouble while working with influencers. When you find out that the problem that I am solving is close to your heart, you are convinced.
But it was not easy. I had to show everything. We were early in our careers. The platform was early. We had to prove a lot of things to the investors to gain their trust. I had to show them how the platform works. I had to show them the data such as how many campaigns we did in how many days and so on. Initially, I had to show a lot of proof of how it works. But as soon they saw the product and the data, they were convinced. And as soon as the first round of investors came on board, it was easy to convince the others later on.
Ruhul Kader: What is a Hype Scout today? How do you describe the company? Please tell us about the products and services you offer to your customers.
Faym Bappi: As I said, we started almost two years ago. We started with about 50 influencers. Right now we have approximately 30,000 influencers registered on the platform. Out of that, approximately 30% of people have got paid jobs, and 70% of people got some sort of job.
You can have two types of collaborations with influencers on HypeScout: paid collaboration and free product giveaway collaboration. Let's say you are a clothing company. You are running a campaign but you don’t want to get into a paid collaboration. What you can do is you can give a dress to an influencer, and in exchange, you can ask for some sort of shout-out.
We started with only 10 brands. Today, we are serving over 4000 brands through the platform.
While the number of influencers and advertisers has been growing significantly on our platform, our team has not. We have always wanted to build a lean operation. We have automated our processes. Our goal is to automate to the extent that if it was one person handling 10 campaigns before, through automation we should take it to 100 campaigns per person. We have been able to achieve that to some extent.
Every month over 100 campaigns get completed through our platform, involving five to six influencers, which means every month we are helping 600 influencers to connect with 100 plus brands and earn money in the process.
In 2022, we have seen that influencer marketing for us has grown by 300% in terms of user acquisition, brand acquisition, and number of campaigns compared to 2021. In our second year, we have seen 300% growth, which is inspiring.
Besides, we are working with many different types of influencers. We have people from the corporate world like Don Samdany, who is a trainer and motivational speaker. We are working with cricketers like Shahriar Nafis, and footballers like Zamal Bhuiyan. All these people who belong to different industries are on Hype Scout.
We have raised another round of pre-seed investment recently, which we’re calling the pre-seed B round. We have raised a total of $280,000 in our two pre-seeds rounds.
Ruhul Kader: Can you talk about the products and services you provide to influences and brands? For instance, if I’m an influencer, what do I get from HypeScout? And if I am a brand, what do I get from HypeScout?
Faym Bappi: The platform is completely free for influencers. We are helping influencers to earn and reach more potential brands they may collaborate with. We have a portfolio builder feature that influencers can use to complete their profile and build their portfolio. And then they get hired or they get contacted by the brands that we have on the platform.
As I mentioned, we already have 4000 brands on the platform, and approximately 200 agencies, both big and small. Brands and agencies can invite influencers to their campaign. They can chat with each other and discuss further the campaign, the content, etc. Before influencers didn’t have a way to find brands or brands didn’t have a way to find influencers, we’re bringing more campaigns to influencers.
One of our surveys shows that HypeScount brings approximately 30% more campaigns to the influencers. If an influencer was doing two campaigns in a month before, they're now doing three campaigns. We are helping influencers to earn more by working with more brands.
We are also helping influencers with data and a standard pricing system. We have a price calculator. Influencers and advertisers both can use the calculator and understand if I have this many followers and engagements and if I am popular on this platform, what should be the price. There are a few other matrices that our system calculates based on previous data. Looking into all these our system suggests an average charge that an influencer should quote to the brands. We have data from over 10,000 collaborations. We know the prices and performance of these campaigns, which allows us to suggest reasonable prices and details. So we are helping influencers to understand how much they should charge.
The fourth is we have a social media link aggregator feature called Hype Social. You probably have heard about LinkTree, which is popular in the US. They have raised millions of dollars to build a product that is only a feature for us. And that comes completely free for the influencer. HypeSocial is a micro website builder, where the influencer can create a micro website and put together all their social media links into one page so that their followers can find them everywhere. This is something that we have seen a lot of business people also use.
Our influencers have found the feature super useful. Because their followers want to follow them everywhere. But you can post only one link on many social media platforms such as TikTok or Instagram. That’s a problem influencers face. When they want to try a product like Link Tree, which is a paid product, they need an international credit card, which many people don’t have. We thought we would build something for free for our influencers. Right now, approximately 70% of our influencers base use this feature. That's for the influencer side.
For the brands, we are saving them time and money. Before, if a brand wanted to work with 100 influencers they would need to prepare a list of those 100 influencers, analyze their profile, and then reach out to them individually, be it through Instagram, Facebook, or email, and then negotiate with them a price. You would have to talk to them individually and ask for different prices. That whole thing was complex, lengthy, and expensive. We have streamlined the entire thing for the brands. You join HypeScout, design a campaign, launch it and sit back and watch. If you launch a campaign on HypeScout today, you will get requests from over 100 influencers tomorrow. We are more like a marketplace where we connect brands and influencers.
It saves time and money for brands. It makes the pricing competitive. If a brand reaches out to a lone influencer, they don’t have any reference for pricing, which may lead to skewed pricing. We make it easier for brands and influencers to find pricing that makes sense for both parties. For brands, it allows them to work with more influencers and compare pricing.
Since we work with a lot of influencers, we have built a data engine that helps brands see details about the audience of any particular influencer. If you are a brand, you might want to see the user profile of an influencer before collaborating with them. We provide brands with detailed follower data of influencers including age, gender, geography, etc.
Finally, we have a URL shortener similar to bit.ly/cut.ly that we call HypeLink. It allows brands to track the performance of a campaign. Brands can create custom links using HypeLink that they can give to influencers and can later see the results from those links. It allows brands to understand which influencer/post is driving better results. It helps generate details data about clicks, and users across many diverse points including device, location, and so on. This helps the brands to understand more about the performance of an influencer and their target groups. Going forward, the vision with HypeLink is to predict sales and share ROI reports.
Ruhul Kader: How does your business model work? How do you generate revenue, how do you make the platform sticky, and what are other intricacies in your business model?
Faym Bappi: When we started, we had a commission-based model and used to take a commission per campaign. However, we changed our model to SaaS in November 2022, where we charge a subscription fee from the brands for all the data, analytics, and enabling them to connect with the influencers. The subscription fee starts at $49/month. We charge it from the brands only. We don’t charge influencers anything.
We have a couple of upcoming features in the pipeline that will help the brands do even more using our platform including things like social listening and so on.
For influencers, we’re bringing in content scheduling, and content creation. Many influencers face challenges with creating content such as writing a good caption. We want to build a platform that helps the influencers with all these things. Another big problem influencers face is content scheduling. For instance, you are on six different platforms, which requires you to go to all these platforms to post. If you are a one-person team, it takes a lot of time. We plan to build something that automates this posting thing for influencers and will enable them to post across platforms just by uploading it to HypeScout.
Ruhul Kader: How do brands make the payment? Is it integrated into the platform or do brands directly pay the influencers?
Faym Bappi: In most cases, yes, now brands pay directly to the influencers. Before, when we were in a commission-based model, the process was slightly different. The brands would pay us and then we would pay the influencers once the campaign ends. Since we are only charging a subscription now, we don’t handle payment. Brands pay influencers by themselves.
However, we have three different subscription packages. If you take our second and third packages, the brands can request HypeScout to manage the payments to influencers. In those cases, we do help the brands with managing their payments, if they subscribe to one of our particular subscription plans.
Ruhul Kader: Can you give us an overview of the company today in terms of how big is your team, how many paid subscribers you have, and a little bit about how the company is structured culturally and operationally??
Faym Bappi: We are a team of only 16 people. In our first year, we were a team of 10 people. Our team has not grown compared to the growth we have seen in our business. We have 40-plus unique subscribers. But as I mentioned, we only launched the subscription just two months ago. Before that, there was no subscription fee, we used to take a commission per campaign. The model is new for our users. After launching subscriptions two months ago, we have over 40 unique subscribers.
I have spent much of my career working at early-stage companies. We have that scrappy culture of startups where everyone is wearing everyone's hat.
There are no fixed job descriptions. There are but if we see something needs to be done, we don’t wait for others. If I see dirt on the table, I clean it. It's not like, no, that's not my problem. We are a small team. Everything is everyone's problem. I think I got that habit from my previous workplace Pathao. I tried to bring the good values I learned there. Culture is something that evolves and grows. It is never static. We are open to trying out new ways and new things.
Ruhul Kader: How do your marketing and distribution work? How do you reach out to the influencers and the brands?
Faym Bappi: Our influencers' growth has mostly been organic. We benefit from word of mouth. We are also doing influencer marketing on our own, which helps. Finally, we have a referral program where influencers can earn money by referring others. That's the acquisition strategy for the influencers.
For brands, we have a slightly different strategy. We are partnering with agencies. We don't see agencies as competitors. Although initially, many agencies thought of us as a competitor. Gradually, they came to understand our platform and now use our platform for brands and to work with influencers. We’re partnering up with a lot of agencies, and they bring their clients. Besides, we also reach out to the brands ourselves.
Ruhul Kader: You briefly talked about how big the global market is going to be in the next couple of years. How big is the market for influencer marketing in Bangladesh, and how big can it become over the coming years?
Faym Bappi: There is no accurate estimation. Our surveys and analysis suggest the total influencer marketing space is about a $140 million market annually, both paid and unpaid collaborations. If I consider only the paid collaborations, where the monetary transactions are involved, then it will be something around $40 to $50 million, yearly.
Ruhul Kader: That's a sizable market, and it's a growing market, of course. What are some of the major trends in influencer marketing?
Faym Bappi: That's a great question. To answer that question properly, you also have to understand the industries that are taking advantage of influencer marketing the most now. There are three trending industries — fashion and lifestyle, beauty and makeup, food, and restaurants. These are the three biggest industries that are investing heavily in influencer marketing. The rest of it comes from travel, blogging, gaming, streaming, health, fitness, etc.
What we have seen is that people nowadays are more into short content than long-form content. They like reels and Tiktok versions of the whole content. They like YouTube shorts. This trend is prominent across platforms. And this is happening globally. People are watching more short content.
We’re seeing the same trend in influencer marketing. A lot of beauty vloggers create short videos on beauty tips and tricks. Before, it was like 15-minute videos. But now they're saying the same thing in 15 seconds. That is something interesting. I assume that this trend will be around for the next couple of years. I don't know what will happen after 10 years, but for now, people are preferring shorter content.
Second, people prefer authentic content. The days for beautiful, clean, and fancy setups, well-directed and edited but kind of inauthentic videos are gone. People now prefer real humans, messy rooms, and real interactions. People are more into learning about what the influencers they follow eat, wear, where they sleep, and so on.
To sum up, two major trends we are seeing are the length of the content is getting shorter and people are more into authenticity and raw content than polished things.
Ruhul Kader: What are the challenges for HypeScout today?
Faym Bappi: One big challenge is the growing industry while finding a sustainable approach to growth for ourselves. As a company, we need the industry to grow faster so that our market also grows. And growing the industry is not easy.
That is one of the challenges that we have and one of the reasons that we also want to step outside of Bangladesh.
Bangladesh will remain our main market but since it's not an established market yet, we need to tap into other markets. For example, the Philippines, Singapore, Indonesia, etc. We're planning on that. Hopefully, we will be international very soon.
Ruhul Kader: So expanding into other markets is one of your priorities. Any other plans? Also, do you have a timeline in mind in terms of going into other markets?
Faym Bappi: This year, we plan to tap into the Philippines. If that market works well, then we have plans to explore Singapore, India, and Pakistan. But we’re starting with the Philippines and a lot depends on how it goes.
In terms of other priorities, we aim to build a bridge between the influencers and advertisers, where we can save time and money for both parties, by building a data-driven influencer marketing platform. That's what we are, and that's what we want to focus on in the coming days.
Ruhul Kader: I don't know of any other platform operating in this space in Bangladesh. If we talk about platforms, you probably are the only platform in the market. Who are the other major players in this space?
Faym Bappi: There is no other influencer marketing platform in Bangladesh. However, there are influencer marketing agencies that are solely focused on influencer marketing. Some of those agencies are influencer hubs. For instance, Marvel—Be You, Glee Digital, etc. But we're the only data-driven influencer marketing platform or marketplace, where we connect brands and influencers.
Globally, there are a couple of similar influencer marketing platforms. For example, in Pakistan, you have Walee. Walee is somewhat similar to HypeScout, except they are not a subscription-based model. They are more like what we used to be before — a commission-based model. There is another platform in Pakistan, which is more similar to ours in terms of working with micro and nano influencers. But then again, they're also not a subscription-based model.
In the US, you have platforms like Hashtag Paid, and Grin. These companies are more similar to what we’re doing. They have an influencer discovery tool, and an influencer management tool and they charge subscriptions. The only difference is they have raised tens and thousands of dollars in funding. There are also a couple of players in Singapore.
Ruhul Kader: You have been operating for two years now, was there a turning point in your journey, in the journey of Hype Scout, or any particular event that set you up on an upward trajectory, sort of an inflection point?
Faym Bappi: I am sure there were/are several events instead of just one. For example, getting into the North South University incubator program, NSU SN, helped us to connect with an investor network that eventually helped us in many other ways. That's number one.
As I said, we have operated on a commission-based model for almost two years. When we pivoted from that model to a subscription model, it allowed us to sustain and bring more growth. It has been an important turning point for us. I am glad that I decided to turn us into a subscription-based model from a commission-based model.
Ruhul Kader: Can you briefly talk about your decision to pivot away from a commission-based model to a subscription model? What was the reason behind that? Changing an entire model has to be a difficult decision.
Faym Bappi: There are a couple of big reasons behind changing our model.
In many instances, B2B payment terms and cycles are quite unfavorable for startups like us. Many companies have messy payment cycles that take between three to five months and in some instances eight months to get paid. It was a major challenge for us.
Our model was to charge the brands upfront, keep our commission and then pay the influencers. In most cases, however, it didn't happen because brands and agencies don't have any model to pay their vendors upfront. Consequently, we faced a lot of payment delays and hence had to pay influencers late, which resulted in influencer dissatisfaction. To maintain a good relationship with influencers, we had to pay them ourselves using our funds.
The earlier model also had a perception challenge. When I charge you, let's say 10 lakhs taka for a campaign, out of which nine lakhs and 50,000 taka goes to the influencers and we get say only 50,000 as commission, you as a brand or as an agency consider that you have paid me 10 lakh taka and you expect 10 lakhs taka worth of work from me. You wouldn't care how much I have paid to the influencers. So it was a challenge as well.
Since we were already paying almost all the money to the influencers, we thought okay great, why not do a subscription instead? Brands now understand that they pay me only $49 and then pay the influencer directly. These were a couple of main reasons.
Ruhul Kader: A couple of quick questions. Four major challenges you faced in your entrepreneurial journey so far and the way you overcame them.
Faym Bappi: If you ask any entrepreneur, the first challenge you will hear is the funding — how to connect with the right investors, how to pitch them, etc. All these things are difficult and obvious challenges. To that end, getting into NSU SN was super helpful for us. It was an excellent learning experience. We got to meet with an excellent network of investors and stakeholders. There are several interesting incubator programs out there that can help startups to change their trajectory. They can help founders meet new investors, learn important skills, and get funded.
The second problem that we faced and still facing is finding good talent and retaining them. I think this will be a continuous challenge. It's hard to find like-minded people. You find someone good at what he or she does, but doesn’t fit with your culture. And you eventually had to let them go. You probably have someone who is doing well and is an excellent culture fit but has very high expectations. Retaining them becomes costly for you. What sometimes works is that you offer equity to early people, who are of super high caliber. This is a complex challenge.
The third problem is of course acquiring users and maintaining low user acquisition costs. When you start acquiring users, you get a taste of it. You start acquiring more users, and then eventually you find out that your user acquisition cost is high and you have a retention problem. Now you are faced with a new challenge, where should you focus? Should you focus on acquiring new users? Or should you focus more on retaining the old users that you have? We have faced this challenge a couple of times at HypeScout, where we shifted our focus from user acquisition to retention, and then retention to acquisition. Currently, we’re focusing more on retention than acquisition. Then and again, when you will look for new investments, you will have to look for acquisition. Because it's hard to raise funds without growth. What I'm trying to say here is that you have to find a balance between new user acquisition and retention.
The fourth challenge I would say comes from legal issues and financial issues. A lot of founders in our country learn finance and legal matters when they face a problem. That’s a problem. If you don't have any knowledge about how the legal matter works, finances work, a cap table works, what an income statement is, and when and how much tax you should you, it is a difficult situation. In many instances, founders find out all these things after they start their entrepreneurial journey. It takes a lot of time to learn these new things. And you need to find people who you can trust with all these things.
Ruhul Kader: Three mistakes that you think you made over the last two-three years that you'd like other founders to avoid?
Faym Bappi: One mistake would be what happens with fundraising. We think we have time and runway, but you should be careful about not being too optimistic. I have seen investment deals getting canceled at the very end. Everything is locked. Money will be disbursed in two months. And then it gets canceled. You have to assume the worst always. You have to be prepared all the time. And you should always raise more than what you need.
The second mistake would be hiring good people. Many times early-stage startups want to hire top talents. But you raised say $20,000-$25,000 and can't afford someone expensive. You find interns, part-timers, consultants, and people like that. Eventually, you grow, you raise more funds, and then you try to bring experienced people. But sometimes it contradicts your already built-in company culture. It doesn’t go well with your existing team, who doesn't have that exposure, or expertise about how businesses and compnaies work. It can lead to misalignments when you hire interns first, and then managers later. Whereas it should be the other way around, you hire the managers and they hire the interns. That's how sync happens. But when you do the opposite because of the fund, you face some problems. This was the second mistake that I think I made. But I had nothing to do.
Ruhul Kader: The most difficult part of being a founder, and the most rewarding part of being a founder.
Faym Bappi: We all know the difficult parts. For instance, founders don't have holidays. It has been over a year and a half since I took a day off. I couldn't take days off. It can get exhausting sometimes, you are a human after all. You have to make a lot of sacrifices — less time for family and friends and so on.
But you make those sacrifices to realize a vision. That's where the reward part comes in. Where do I get my motivation? Why make all these sacrifices and do all this hard work? For me, the biggest reward is when I see my actions have a greater impact on other people's lives. That is something that I looked for when I was working at Pathao. I used to work in marketing, and when I saw if I worked a little harder my work resulted in more ride requests. That means I am helping more drivers to earn some extra money. Similarly, at HypeScout I feel really good when at the end of the month my team members get paid. I feel good when I see every month there are new influencers, who are getting paid jobs. All these things bring joy to me. For me, the reward is seeing that my little actions have an impact on the lives of people.
Ruhul Kader: Best advice you received as a founder.
Faym Bappi: There are a lot. I’ll share one piece of advice that stands out. Before starting my entrepreneurial journey, my ex-boss Elias bhai, former CEO of Pathao, told me a couple of things. One, if you can’t get your first customer in three months, then probably you or the idea, or the current market is not ready for it. I tried several other ventures before HypeScout and failed. I always used that framework to test ideas. The second piece of advice is quite common: the idea is cheap, and execution is what matters. This is something we always hear, but don't follow. Many people worry that others will copy their ideas and don’t share their ideas. This is a wrong understanding. Instead, people should share their ideas with others and get feedback to improve them.
Ruhul Kader: Three books you'd like to recommend to our readers.
Faym Bappi: One book that I receive a lot of recommendations for is The Lean Startup. I haven’t read it yet but I plan to.
Ruhul Kader: Three things you found advantageous/helpful while building HypeScout. Things that center you and help you to deal with the ups and downs of being a founder.
Faym Bappi: There is no one size fits all solution to this. One of my hobbies is photography. I paint. When I'm stressed, I paint or go out with my camera and it works for me. I also meditate. I often pray when I am stressed or going through a major challenge. All these things help.
Ruhul Kader: Two fundraising lessons for people who were trying to raise their first investment?
Faym Bappi: A lot of early-stage founders think that they can ask for a big valuation, which is not true. Because in the early stage, there are no metrics to calculate valuation. It's just what you and your investors agree upon. It is hard to be objective in these early rounds. The best approach I would say is that you find the investor you want to work with and agree on mutual terms that benefit the investors and the founders and get moving.
Founders should be careful about being too picky about the valuation. For example, our first investment round didn’t work because I was too picky about valuation. I was arguing for a couple of more percentages, which we should not. Because in the early stage, the only valuation the company has is zero. There is no valuation until someone ascribes a value to it. That's something that early-stage founders should understand.
Ruhul Kader: What are a couple of startup tech trends you're watching this year?
Faym Bappi: In marketing, Maropolo has been doing excellent. The space they operate in is an interesting one. They are now serving customers from all over the world. And similarly, MyAlice has operations in the Philippines and a few other countries as well. These are a couple of companies and trends I’m watching in marketing.
In FinTech, there are companies like Mitro, which is also a new concept for Bangladesh, enabling the employees to get their earnings before payday. In retail, there are a couple of products such as Bonik.
We are seeing a lot of activities in telemedicine and agriculture. There are several interesting companies in agri-tech now including Foshol and AgroShift among others. So agriculture, FinTech, retail, ecommerce, and new things in marketing.
Ruhul Kader: Three lessons you have learned from your journey so far.
Faym Bappi: I think a lot about the idea of success and happiness. People ask me, when do you think you will be successful? I say I don't think I will ever be. Because there is no fixed definition of success. It is a never-ending staircase. You just keep climbing. There is no station.
If you think you will be happy once you reach a certain destination, then it might never come. I think the best thing would be if we try to be happy at every step of our journey. Instead of waiting for the ultimate happiness, it is better to be happy now with whatever you have. I think you shouldn’t make your happiness conditional on something else.
Ruhul Kader: That’s beautifully put. I think this is a good place to end this conversation. Thank you so much for taking the time. I thoroughly enjoyed our conversation.
Faym Bappi: Thank you so much. It was great talking to you as well.
