Gold Rush­ Bangladesh!

The year was, I think, 2006. I was working for development of the furniture sector in Bangladesh, when I became friends with leading furniture manufacturers of the country. I was amazed at how passionate they were to build this sector. They were all competitors in the market. But they stood shoulder to shoulder when it came to making decisions about helping the sector grow and thrive. At that time, I moved from factory to factory, met with the SMEs, discussed their challenges and worked with their associations to develop viable solutions.

It was one of these encounters with the SMEs that I will remember forever. One day, one of the furniture manufacturers, whom I always saw in one corner of the meeting room, approached me and asked me to visit his factory in Badda in Dhaka. We made an appointment. After few days, I was given a tour in the factory that he was operating and the new one that he was then building. As we walked through the space, I was given a different kind of a tour. A tour to the past of this humble man in his mid forties, who once worked as a labor in Vietnam, fled from the factory to escape from the immigration police, and after escaping from one border to the other, came back to Dhaka to first work as a hired carpenter, and later to launch his own company, supplying the best of the furniture to the five star hotels of the country.

In many ways, it is because of these entrepreneurs, who have learnt to defy all odds and take control of their fates, that Bangladesh continues to surprise the world with its continued GDP growth rate of 5%+. From livestock to fisheries, from agriculture to industries, I have encountered both the young and not so young, who have been doing wonders with whatever resources that they have. They possess tremendous ingenuity.

Last year, I interviewed a woman in her early thirties in the northern chars (river islets) of the river Jamuna, during one of my assignments of designing a project for the region. She explained to me why she planted several Eucalyptus trees around the fences of her house. She had a daughter, about 12 years old. The Eucalyptus trees were her fixed deposit for her daughter’s marriage. She had 7 trees. In 7 years, she could sell them for around TK 5000 to TK8000 depending on the size of the trees. She said, the money would come handy for her daughter’s marriage! It was so simple, yet so strong a message; that you can change your fate by just making the best use of the resources around you.

But unfortunately, while the people we label as ‘poor’ ,‘marginalized,’ or ‘resource less’ and the enterprises that we label as ‘SMEs’ kept on surprising me; the people with the resource, particularly the generation in their twenties, disappointed me because of their risk aversive career choice and preference for immediate gratification. In the last semester in Business School, one of my teachers asked how many of us wanted to be entrepreneurs after graduation. Half of the class raised hands. He then asked, how many of us wanted to start our venture immediately after graduation. No one raised hand. ‘Look boys and girls,’ he said, ‘once you graduate and join the MNCs, you would be given air tickets to fly, you will be dining in the best restaurants of the country, you will have your office on the best of the properties. If you think you can disregard that comfort after couple of years and start your own venture, I tell you, you are fools!’ His words kept haunting me as I did exactly the same.

I joined a multinational NGO and worked for the largest market development project in the world at that time. Even though I had enough exposure across the country working with the marginalized people and SMEs, I worked from all the comforts of a multinational company. I made several visits to international conferences every year and slowly but surely, I was drifting away from my dream of becoming an entrepreneur. I attempted to launch a company as a part time venture and it failed miserably. But after about four and half years, I dared to venture out, teamed up with one of my colleagues and had a golden hand shake with my employer which gave us the money and the project to begin with.  We launched our own research and project management consultancy specializing on making businesses socially, environmentally and economically inclusive. The comforts were lost just for about a year. Second year into our venture, we earned more comfort than any of our employers could ever provide! Five years into business, we were earning more money from international business than local. Suddenly, I was seeing more opportunity around me than I ever did. It felt like a gold mine is waiting for the miners to arrive. I was thus searching for people, of my age, who saw the same opportunity.

Finally, last year, thanks to my assignment on designing an innovation project for the health sector in Bangladesh, I found the miners. Young, dynamic and charged! Some of them as young as 15 year old! Some of them left lucrative positions in multinational banks to launch their own enterprise. One left all offers for jobs and became a chronic investor, launching companies one after the other. His ventures ranged from restaurants to hotels, from IT to trade. Last year (2013), we also saw the emergence of the startup phenomenon in Bangladesh. The first ever StartupBash was organized by some of the leading young entrepreneurs and thinkers of the country. Non­resident Bangladeshis with exposure to the global startups joined hands. Would be entrepreneurs, as well as established businesses, came with new bright ideas and pitched for investment. One of my foreign colleagues, who is married to a Bangladeshi and have been living in the country for the last 25 years, told me that she never saw this side of Bangladesh. It is new and fresh and it is all set to win!

While all of that is good, it is also important to set the course to the right direction. What worked in America, will not necessarily work in Bangladesh. There are few trends that I would like to flag as misled and myopic. I have deliberately averted on citing examples as that would do more harm to the businesses than good. If you are reading this, I would advise that you check whether these are relevant for you.

First and foremost, I have encountered many ventures and business ideas last year which are designed to collect Facebook likes rather than money.  There is, thus, this preference to come up with unrealistic business models which appear to be noble but in reality which are not feasible.  If you are repeatedly thinking about Facebook community when planning your business, then please note that there is all possibility that your venture will fail. If your Facebook friends are your target market, then of course do think about them. Then again, think about the money first than the likes! If money comes, ‘likes’ are bound to come. Not vice versa.

Startups have become synonymous to information technology.  While I understand the reason for that, I don’t like the fact that everyone is driven by IT. All businesses in the world now need an IT interface. But that does not make them an IT company. It appears to me that everyone here now wants to develop an IT company rather than thinking about how IT could be the competitive edge of an otherwise non IT company. Do remember the classic principle. All businesses should solve a current or perceived problem of the customer. What problem are you trying to solve? Is IT the means to solving that problem or is it one of the components of the solution?

Finally, everyone now wants to launch a social business. I don’t have a problem with that. But I have a problem with the fact that people want to launch social business because of the hype rather than the fact that it would work. At the end of the day your business need to earn money for you, your employees, your shareholders and it would have to deliver sustainable products to the customers at competitive price. Besides, your business needs to be scalable. This means you need to generate large number of customers and large volume of sales. Most of the new businesses that I come across fail to generate scale and are shut down or discontinued. So remember that if you forget thinking about the viability part of your business and focus only on the social part, you might gather a lot of media coverage, but not necessarily your business will prevail.

It is also important to note that the most important contribution of businesses to the economy is the employment that it generates. We can criticize the RMG industry in Bangladesh for all the wrongs. But we also need to remember that it is the powerhouse of the economy and generates more jobs for skilled workers than any other industry even though the industry might have failed to ensure wider welfare of the workers. The most important value addition from your side would be if you can think about creating jobs and ensure welfare of your employees and workers. The number of sustainable jobs that you have created should thus become a core focus of your business plan and your success indicator. If you have created sustainable jobs, you must have ensured social benefits, your business must have reached scale and it must have solved a problem or an unmet demand of the target market! With that being said, I welcome you all to the camp. The Gold Rush in Bangladesh is real. And it is now!

Md. Rubaiyath Sarwar is the Managing Director of Innovision Consulting, an international consultancy specializing on research and project management services for inclusive and sustainable businesses.