Dhaka tech startups
Challenges and promises
FAISAL MAHMUD
In the last two odd years, the word startup has become a buzzword in Dhaka, especially in the Information and Communication Technology (ICT) sector where the young tech professionals prefer entrepreneurship over salaried jobs.
By definition, a startup is an entrepreneurship or a new business in the form of a company, partnership or temporary organization designed to search for a scalable business model. In simpler terms, a startup is a new small-budget company designed to scale very quickly. It is this focus on growth unconstrained by geography that differentiates startups from small businesses.
The term became popular internationally during the dot-com bubble, when a great number of dot-com companies were founded. In Bangladesh, it became popular with the increasing popularity of internet and social media, which engineers an interest among the young generation to popularize the concept.
With a number of promising tech startups like NewsCred, Chaldal.com, Strategeek Digital G R Ad Network, young entrepreneurs of Dhaka have already proven their worth. Experts believe that although the startup scenario in Dhaka is in a nascent phase, fast growth and huge market potential makes it a very promising concept.
Fayaz Taher, an angel investor currently based in Bangladesh, said the investment scenario in Bangladesh is evolving as more and more sustainable businesses come into play and high net worth individuals locally find themselves getting attracted to the ecosystem.
On angel investment, Fayaz Taher opines that it is a viable funding option for startups in Bangladesh, where startups can find an angel or a group of angel investors to purchase equity in their company and get not only monetary funding, but also an invaluable rolodex of contacts, besides priceless experience and knowledge.
Traditionally, people saw investments from friends and family, but now there is an informal, local angel investment network which mainly invests in tech startups within the range of US$10,000 to 50,000.
There are innovative entrepreneurs, building inspiring business models in Bangladesh, who can disrupt industries at a global scale, like NewsCred, he said. Newscred is a leading startup founded in Bangladesh that raised $25m in investment.
Taher said the problem comes with having to convince large investors to invest in a tech start-up. I have business in leather and food industries. When I started to invest in the IT sector and reaped benefits, others too got interested, he said.
He believes the government should provide a tax break for investing in startups and there should be a separate tax policy with a clear and well-defined definition of a startup entity. The registration process should also be eased.
Taher, who is also a co-founder of SD Asia, a tech news website and a platform for local start-ups, said that in Dhaka, there are a host of organizations dedicated to the nurturing of startup ideas. SD Asia creates a platform where future entrepreneurs can come and discuss their ideas. It provides an opportunity for young entrepreneurs to learn from seasoned ones, he said.
Aside from SD Asia, groups like Desperately Seeking Entrepreneurs (DSE) were formed where a potential startup could seek advice, present ideas and follow up on the critique.
DSE also helps minimize time and effort in looking for professionals and personnel for hire, through a system of referrals.
Samad Miraly, a Canadian-Bangladeshi investor who has investments in several tech startups, said being an entrepreneur should not be a goal. Neither should getting funded. What is of value is being able to solve a problem, he remarked.
He explained, A problem can easily frame goals. Defeat the problem. Its that simple. It is that drive that pushes people to create valuable companies and unseen problems that push the boundaries of innovation. Instead of wanting to be an entrepreneur, fall in love with a problem.
To date, I have invested in 5 startups in Bangladesh, All of them were born from a clear problem, he added.
About raising funds for the startup, Miraly said there are various ways for startups to raise funds. One of the most popular ways is crowdfunding. Crowdfunding on the Internet is yet to receive popularity in our country, but traditional crowdfunding, where we seek money from our relatives and friends has been and continues to be practiced.
Theres more to funding startups than just money. You also need people with expert opinions to guide you in the initial stages of starting out which is not available through crowdfunding.
Meanwhile, the young entrepreneurs who want to create their own startup said that a good network is very crucial to build a successful business. Ssakib Jamal, co-founder of DrinkEnterpreneurs, another startup said its easy to get connected via Facebook or Linkedin, but networking just doesnt only mean getting connected.
Regular interaction is very important. Thats why we formed DrinkEnterpreneurs, said Sakib. We provide a platform for both local and international founders/professionals to network, collaborate and share ideas. We also partner with a number of organisations if they need to communicate a certain program.
Recently, we partnered with SD Asia to promote the GP Accelerator program, as well as Orinus Partners Japan to brand Link Business Collaboration Platform, he added.
On the importance of bringing large local conglomerates into IT and tech start-ups, Mustafizur Khan, founder of SD Asia, who has long experience in the banking sector, said that without investment from the former, the tech sector cannot move ahead.
Bangladesh is not known to the outside world for its success story in the tech field. Yet, many global tech giants are planning to come to Bangladesh. This is because we have a huge young population, which is able and willing to work for relatively cheaper wages, he said.
However, remarked Mustafizur Khan, We can only showcase the potential of investment in the tech field to large investors. At the end, the decision has to be made by them.
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