Entrepreneur takes a leap of faith

A lot of my friends come to me. They want to be entrepreneurs. They are otherwise working for somebody. They want to break the shackle and unleash their possibilities. Pursue their own dreams.

We meet, we exchange ideas, we analyze feasibility, we figure out financial details, and touch almost all aspects of a business plan. They listen, they show interest, they ask questions, they doubt and they dwindle.

They often look for security. Guarantee, or some kind of assurance that their invested time and money would pay off.

They fail to take the leap of faith. There is no guarantee of anything in this imperfect world, my friend! To be an entrepreneur, more than any thing else, you need to take a leap of faith.

Are you ready for this?

Note: Inspired by a talk of Rubana Huq titled: "Perceptions and Realities of a Garment Wallah" at ULAB. 

Focus, or Not

I have been working and studying in USA for a couple of weeks now. I revisited USA after a decade. I am looking at the country with more experienced and educated eyes now.

I don’t see these guys are genius. They are not more hard working either. But each individual here does very good at what he does. They focus on a single area, and be expert of that. When you have a working system based on trust, when components add up to form synergy, you are better off focusing on your niche.

In a developing economy where almost nothing is built you need to build everything from the scratch. You almost end up building every component of the system to reach to a sustainable model. Is this efficient? Surely not. But you have no other choice. That is why Muhammad Yunus, starting with micro credit, ended up founding so many businesses, and now talking about even more. That is why great entrepreneurs like Sir Abed, Akij and Samson H Choudhury built so many businesses. That is why Henry Ford ended up integrating from mining to retailing.

Now that they have other pieces of the system working, they can really focus on a single piece. Keep doing whatever they are good at. Excel on that.

We, on the other hand, are still at the Henry Ford phase. We got to be generalist, keep integrating forward and backward. You can’t imagine the first human being on earth, Adam, was a specialist, can you? He was a generalist!

When no working system exists you need a good number of generalists to build one.

5 Tips to Build a Successful SaaS Product in Bangladesh

Form my previous post, Internet Products or SaaS in Bangladesh, it looks like bdjobs is the only celebrated success story in this area.

Why? What is the catch? I think the catch is to

A. Start in time. You start too early, your cash is dried up before you turn the business to a profitable one. You start late, too many players don’t allow you to gain enough customers. Customer acquisition cost shoots up.

Make sure customer acquisition cost is lower than the lifetime value of your customer. Now, what is that? If your total marketing cost (includes sales, marketing & advertising cost) is Tk. 1o lac and if you acquire 1000 paying customers with that money, you per customer acquisition cost is tk. 1000 (=10 lac/1000). On the other hand Customer Lifetime Value is ARPU * Customer’s Average Lifetime. ARPU is Average Revenue Per User (User is synonymous to Customer here). Customer Lifetime is the time a customer stays with you. So, if your product’s subscription charge is Tk. 1000 per year and if a customer stays with you on an average  for 3 years. Then your customer’s Lifetime Value is tk. 3000 (= tk. 1000 * 3 yrs). So, you have to make sure Customer Lifetime Value > Customer Acquisition Cost.

Sounds good? But you might like to discount the paybacks and apply the time value of money as well.

B. Start with deep enough pocket to sustain long enough and to acquire enough paying customers to reach break even.

C. Ensure you are strong at both ends: IT and marketing. You have a great IT team, and you think you can build a better product than bdjobs in a couple of months. Great! But do you have the marketing budget and expertise to bite a share from a company with tk. 6.5 cr yearly revenue, or from a group like Transcom (prothom-alojobs)?

Equally important is your IT team. I think Prothom-alojobs could do better had they have an IT team with better know-how in design, usability and performance.

D. Possess business domain expertise and connections. Not for all product it is crucial, but for some for sure. For example you are thinking of building amazon.com in Bangladesh. You need to have connection with publishers, writers and courier services for that matter. Well, you can build those over time, but that turns out to be a fancy idea if already a couple of strong players exists in market.

E. Ensure you have a competitive advantage. Well, it is true for any business. For IT product starting early is a huge competitive advantage. You ride on the network effect. Having a strong brand to piggyback is another advantage that is utilized by Google, Apple and even Prothom-alo in Bangladesh. Strict government regulation can be another one, as enjoyed by baidu.com as opposed to Google in China.

That’s pretty much it. 5 tips delivered as promised :).

So, what are the last words? Last words are This is the time for Bangladesh. I wonder if Akhoni.com has came up with its name from this concept! You delay more only to see some global giant or a tiny Indian company grabs your cherished market left you beholding.

Internet Products or SaaS in Bangladesh

Recently our team is contemplating on some of the ideas to launch a SaaS (Software as a Service) product or a simple internet product. Some of the successful  internet products in Bangladesh I can name are:

bdjobs: job site, successful both commercially and on popularity index. bdjobs registered tk. 65 million yearly revenue last year. Not bad, eh?

prothom-alojobs: a late follower of bdjobs, but piggybacking on its popular Bangla daily, gained some popularity. Its main revenue source is earned from training rather than from job ads.

Somewherein Blog: Started early, and enjoying lion’s share as a Bangla blogging platform. I doubt it generates enough revenue to maintain and sustain global competition. What I presume  Somweherein has other business that ensures cash flow. Aawaj and custom software development are two I can think of.

Contenders of somwherein are prothothm-aloblog, Sachalayatan, amarblog, nagorikblog and myriad more. Obviously they are not commercially interesting.

Champs21 launched with big budget and huge media hype leveraging on its partner The Daily Star. I am sure they are generating some revenue. One thing is good that they did not offer free from the beginning, thus following model of lean startup. Sure Champs21 is yet to recover its investment, but that’s fine. You don’t expect to reach break even in the first year of your launching.

KhanAcademyBangla developed by Nascenia in partnership with the world famous Khan Academy is yet to launch commercially. The content is great and licensed under creative commons, but they are yet to come up with a business model.

Stockbangladesh is hugely popular, at least it was during the heydays of share business. Stockbangladesh earns revenue from advertisement only. Not a very sustainable model, I would say. It probably leverages its popularity to sell trainings and other stock related products to business organizations. OMO is such a product.

A second most popular stock related product is bdipo. Nascenia is the developer an owner of it. It gets revenue from ad and subscription through Freemium model. No, not really a commercially lucrative product yet.

The Ebay model is followed by CellBazaar (acquired by Telenor) and Clickbd. Both are strong players and show all the signs to sustain and make a successful business. Cellbazaar being the partner of Grameenphone sure has edge over others, and sure generates some revenue from mobile platform. Clickbd on the other hand, being a Bangladeshi company, is in an advantageous position regarding issues related to government regulation, permission and expansion.

The very recent addition is akhoni.com selling online discount coupons. Wannabe Groupon in Bangladesh. Stellar start. Time will say how long they need to hang around before becoming next bdjobs.

There are many news sites those are among the top hit site in Bangladesh. They are far more popular than most of the sites I mentioned above. I am confused if I should mention them, as they are more of sites and less of internet product. Especially those who ride over their print editions (e.g. prothom-alojobs, thedailystar, newage). The first notable purely digital news site is bdnews 24.com. The followers are banglanews24 -- created by the mighty and (in)famous Basundhara group and sheershanews.

Is that all? Of course not, but these are the names come up top of mind (ToM) of mine and sure many more like me.

Stay tuned to catch up more about SaaS.

Bumpy Road of a Startup

It's a continuous high and low. We receive an award on one moment, an important client becomes non-responsive on the next. We get a nod from a major client, one of our engineers leaves for a multinational on the next. If you like roller coster ride, bungee jumping, adrenaline rush, horror film or something of that sort, you gotta love the ride on a startup.

No guarantee of a paycheck at the end of the month, you punch your ATM card not to see the account is topped up by an invisible one. You got to plan for your next dollar, but you never know where it is coming from. Usually it comes from an unusual source. Boy! You gotta love this one.

So, how do you survive these? After all surviving is success for a startup, right?

You must know how to dream. Dream of a glorified future on the expense of the bumpy road ahead. That's the entry barrier to this territory. That's why it is not everybody's cup of tea.

Who are the heroes of our time?

Entrepreneurs are heroes. They are the value creator. They see opportunities while others see emptiness. They are the engines of today's economy. They are risk takers, the dreamers and the doers.

You agree with it or not, no matter what your mother said about the business people, no matter how high your father talked about the government  service, or however glorified your friend’s job in MNC seems, or how your brother bragged about his life in a developed country, how every children grown in this country with a dream to be a doctor or an engineer; entrepreneurs are the super heroes of a modern country.

They are the seeds, the organizers, the believers, and the challengers.

Good for Bangladesh that it has just started to know that. If it wants to prosper further, it must recognize the heroes and start honoring them every way it can. Citizens should better cherish to be one of them.

Not every person can be or will be an entrepreneur. Entrepreneurs are the smartest, the wisest, the different and the rare breed of a society. You may not end up being one of them, but if you can, rush to be one.

What is there of more fun and rewarding in life than to dream of something, involve a team in your dream, work to materialize that, live to see your dream come true, live to see how life of many transformed positively  because of you, live to see your creation changing the society and transforming the country? And finally when you are not here, your baton is passed, things become larger and greater, and you still are the seed of a great entity. No one can take that away from you.

So, you the mortal and the small one! are you ready to be someone to create immortals — to create entities of limitless size?

If you don’t think you have the guts to be one of them yet; start by honoring them as the super heroes of your time.

This post is dedicated to Syed H. Rayhan, and all the entrepreneurs and wannabe entrepreneurs of Bangladesh.