Startups: the new rock stars
I had a very interesting experience recently being a part of a podcast on "The Generation Gap". It was attended by three rather young entrepreneurs, two of whom were aged 21, one being my son and the other in his mid-thirties.
It was fascinating to see one earning around $14,000 and another earning $40,000 monthly. One of them strategically does not recruit any qualified resources for his team because, to him, academic qualification is a disqualification. Astonishingly, their earnings are well above the average salary of a CEO of banks and non-banks in Bangladesh. (In one non-bank financial institution, the CEO's salary is below Tk 5 lakh per month as part of a limit control by the central bank.)
The most desirable job in the country in the 60s and up until the early 70s was civil service. Post-liberation, it started losing its charm to doctors and engineers. In arranged marriages, candidates from these professions were considered a big catch, along with non-resident Bangladeshis and those freshly returned from abroad.
In the 80s, the trend changed towards multinational companies, further strengthening with the launch of telecom companies. Now, the new rage is start-up founders and influencers although many from the older generations are yet to accept them as a glorious profession. Soon, they will!
Bangladesh has many successful startups with innovation, resilience, and impact in various fields. These startups have raised millions of dollars in funding from local and international investors and have contributed immensely to the country's development.
Bkash is Bangladesh's first and only unicorn company, valued at $2 billion in 2021, although India has more than 100 unicorns with a combined valuation of $350 billion. Unfortunately, Bangladeshi entrepreneurs struggle to keep pace with India despite state-level support.
Startups are crucial for Bangladesh's development as they create jobs and drive innovation and economic growth. They introduce fresh ideas, foster technological advancements, tackle social issues, and put Bangladesh on the global map.
The most significant risk of the current start-up ecosystem is its financial dependence on external investors. If these investors pull the plug, their entire existence is challenged. Operational challenges often thwart their initial success.
More importantly, when external funds are injected, the founders are compelled to follow the governance and financing aspects that were not part of their initial plans or calculations. My son often educates me about how having no proper accounts and records is the norm for start-ups!
Sixty percent of startups fail to survive due to flawed product market fit, inadequate resources, and insufficient guidance, while 30 percent fail at the operational stage owing to wrong business models, issues with demand generation, governance and planning. Only 10 percent thrive thanks to operational excellence, good governance, agile culture, etc.
Startups are a fast-emerging sector ready to burgeon, given our young entrepreneurs are passionate, resilient, and adaptable. They must focus on developing unique business models, understand the local market, and leverage technology with an eye on social impact. Numerous resources offer support such as Startup Bangladesh and the Bangladesh Angel Investors Network, among others. Simultaneously, our government needs to intervene and lend support whenever required.
Another critical factor is parents' support and understanding. They need to be an integral part of this ecosystem so that these bright rock stars flourish with their full support. My son enjoys full parental support in his startup venture along with his tertiary studies. The aim was to enable him to get the exposure that an academic degree alone cannot offer.
Even if he fails, the knowledge he is gathering along the way will be of much significance to any career path he takes in the future. Now the ball lies in the parents' court whether to see their children as CEOs after years of hard work or support them to become entrepreneur-cum-CEO much earlier.
Startups are the hope for a better Bangladesh and entrepreneurship is the new Bangladesh dream.
The author is founder and managing director of BuildCon Consultancies Ltd