Startup
How to Test and Validate Your Startup Idea?
One of the most common intimidating things with entrepreneurship is that many people are first-time entrepreneurs. The serial entrepreneurs already know the ins and outs of the initial process associated with entrepreneurship. There is no fixed way of starting a startup, as every sector and market are different. As a first-timer, it might seem hard for a potential entrepreneur to test his/her own startup ideas. One of the key ways to overcome this initial barrier is through testing and validating the startup idea. Here is a step-by-step guide for the market validation process.
Why is it necessary to test the startup idea before starting the business?
Prior to understanding the necessity of testing a startup idea, it is important to understand what market validation is. The term ‘Market validation’ refers to the simple process of assessing whether the startup product or service is in demand in the market. A product might be a great fit in a niche but if there are not enough buyers for the product, it is ultimately slated to be a failure.
Testing the startup idea gives first-time entrepreneurs and often serial entrepreneurs a detailed insight into the product demand in the market. A product or service fails because of three things – lack of planning, lack of marketing, lack of custom-tailoring. Testing and validating the startup idea helps to eliminate all of these scopes and eventually drive up the success rate.
Read Common Challenges faced by Startups in 2021
Best ways to test and validate a startup idea?
Pen out the product outline
Many people confuse the product outline with a business plan. In reality, a business plan is a dynamic tool that is susceptible to many changes. A product outline is more like an answer to certain questions on which the foundation of the startup will be based.
Think of the things the product or service aims to achieve. Who is the target customer for the product? What utility will the product bring in the market and to the customer? Does it solve a problem enough to generate a market cap? What is the minimum viable product of the startup? These are just the basic questions when it comes to drawing a product outline. It helps to effectively plan around the product and customer and build a better connection among them.
Read Seed Fund Raising for Startups: Things to Know About
Conduct a survey
Market surveys are a key part of every stage of any startup. It is important to take note that customers and their tastes are dynamic. It is not going to stay constant over time. As a result, the business plan of any startup needs to be molded and upgraded accordingly.
A customer and market survey will help an entrepreneur assess the demand for their product as well as market competition for the product. Furthermore, it is a great way to assess whether a market is already saturated or not. Understanding the needs of the customer will help to better tailor the product to their needs.
Read: ShopUp Raised $75 million, Largest Series B Funding for a B2B E-Commerce Platform in South Asia
Know the market competitors
It is important to find out the competitors in the market. There might be sufficient demand for any product but what if the competitor is a multi-industry conglomerate? They will have far more resources to better manipulate the market.
But that does not mean it should deter someone from entering the market. The competitors can act as a good insight on how a product should be designed, how to market the product and target customers. Instead of getting deterred by competitors, potential entrepreneurs can get better insights from their business models and marketing techniques.
Read: Vroom App: End-to-End Platform for Car, Automobile Related Services in Bangladesh
Create a Value Proposition
Too many startups these days focus on product features compared to value generation. Instead of stuffing features that the customer might not need, the right approach is to generate value for them. In simple words, highlight the value generation in lieu of features. People are motivated by productivity and the idea of value generation will help the customer to respond in a better manner.
Use Product Hunt
Product Hunt is an amazing platform for up-and-coming startups. If you are just getting started with entrepreneurship, Product Hunt can be a great place to see how well your startup ranks among the customers.
Read 7 Local Startups Get Tk 150m Funds from Startup Bangladesh Limited
The platform is like a social hub for startups. Here users get to understand your product in its initial stage and decide whether it adds any value to them or not. It is possible to categorize the target customer and many more on the platform. In addition to these, aspiring entrepreneurs can easily conclude market acceptability through the platform. More details here.
Create a landing page
In this day and age, online marketing is one of the most effective business strategies. Almost everyone seems to have some form of internet connectivity. Depending on the nature of the startup, it is better to create a “Coming Soon” landing page. This will have a triple impact on the business – draw the attention of the customer, assess product interest and initiate a brand valuation.
Read: Late Blooming Billionaires: Story of successful people who started late in life
Once marketing is done through the page, it becomes easier to check the buzz around the product through analytics.
Create an MVP
All of the above processes are meant for superficial market assessment. But a customer needs to see and use a product to deliver their ultimate verdict. This necessitates the need for a market viable product (MVP).
In the pre-startup stage, the MVP can be launched to a limited customer base to assess their feedback. The real-world product usage will help the customer make a more informed decision and ultimately either discard or validate the product.
Read:Investment: What Factors to Consider before Investing Money?
Find the gap between liking the product and buying the product
There have been several scenarios where a product has been liked by a great many people but when it came to product launch, not many people were buying it. Why so?
It is mainly because of dainty features. These features can be better classified as something good if they exist, but will not make much impact if they are absent. A startup needs to refrain from falling in this category as it will give entrepreneurs false understandings of the market. Rather the approach should be a value proposition focused on creating utility for the customer in mind.
Read: Investment Opportunities in Bangladesh amid Pandemic
Final Thoughts
Testing and validating a startup is very much important to ensure its sustainability in the long run. This often acts as the make-or-break factor for any business. Properly assessing the market before making market entry will help to ensure profitability and business survival.
ShopUp Raised $75 million, Largest Series B Funding for a B2B E-Commerce Platform in South Asia
Starting a small business in a country like Bangladesh can be a difficult task. Traveling around the globe to sourcing wholesale products, arguing with shopkeepers over prices, stockpiling products, looking for customers' homes in the city's alleys for delivery, and much more! Now, if you are told that you can get all the solutions from online business sourcing to delivery without any investment by downloading a free app on the phone! Isn't that cool?
More than 6 lakh entrepreneurs have already succeeded in their online business using a single platform. There is a platform where you can get a huge collection of more than 1 lakh wholesale products spread across the country sitting at home! ShopUp has accomplished this impossible task. Now, they have raised $75 Million in new funding to reach more people in Bangladesh as well as abroad.
Read Vroom App: End-to-End Platform for Car, Automobile Related Services in Bangladesh
What is ShopUp?
ShopUp works toward bringing different small and medium traders under one roof. In addition, ShopUp connects the manufacturer with the wholesaler, further, the wholesalers are connected with the retailer and the retailer with the buyer. ShopUp offers a variety of online business services, including promotion of products, timely delivery of products, and high-quality packaging. Besides the website, the platform also has three apps in the Google Play Store.
Afeef Zaman, Siffat Sarwar, and Ataur Rahim Chowdhury launched the ShopUp in February 2016 with the aim of turning the country's potential entrepreneurs, especially women, into successful entrepreneurs by using various services of Facebook and information technology.
Read ToguMogu: One Stop Solution for Bangladeshi Parents
Before that, Ataur Rahim Chowdhury, who has passed Computer Science and Engineering from East-West University, started the smashboard, which used to work with query management through social media. During that time Ataur came to know about the various problems of product delivery services of e-commerce companies in Bangladesh. He discussed the matter with his friends Afeef Zaman and Siffat Sarwar, who graduated from the Institute of Business Administration (IBA) of Dhaka University.
All three agreed that the solution to the delivery problem would change the face of Bangladesh's e-commerce business. Soon after, they started ShopUp in a small office in Lake Circus, Kalabagan. In the beginning, they used to provide service on managing Facebook pages as well as order and manage products.
Later, they added the merchant delivery service. Gradually ShopUp also started giving loans to entrepreneurs for business development. Later, the company also launched a mobile app. That's how today's ShopUp was started.
Read 7 Local Startups Get Tk 150m Funds from Startup Bangladesh Limited
How ShopUp works?
ShopUp works through a few simple steps, but you will need to put some effort into it. However, you can find out whether the product has been delivered or not from the ShopUp app, sitting at home. ShopUp will do all the work for you, which can make your business successful easily and hassle-free.
Firstly, you will need to install the app on your phone. Register in a few easy steps and get more than lakhs of wholesale products for boys and girls, including fashionable dresses, cosmetics, gazettes, and accessories. Download pictures of your favorite products and share them on your business page or do online marketing. When the customer places an order, you will need to place the order in the app and enter the delivery address. Fill out the delivery details, selling price, and other relevant information.
You can find out the real-time updates and payment details of delivery through the app. Profits on full-week sales will go directly to your bKash account next week.
Read Digital Healthcare Startups in Bangladesh: An Overview
ShopUp services
ShopUp offers different types of services to make the business easier. Services include delivery, shop management, and ShopUp assist.
Own delivery service
Delivering products on time to buyers is a challenge for any entrepreneur. That is why ShopUp has its own delivery service to provide entrepreneurs the opportunity to deliver products all over the country quickly.
Shop management services
Entrepreneurs have to update their Facebook pages regularly to make their products attractive to buyers. But everyone cannot do that on their own. Hence, ShopUp has shop management services to solve the problem. The service provides the opportunity to create a business-friendly page on Facebook as well as add up-to-date information.
Read An Overview of Shuttle: A Promising Mass Transit Startup in Bangladesh
Shop Assist
There is no substitute for product promotion to reach online business buyers. But due to a lack of direction, many people cannot promote the product properly. Many also annoy the buyers by promoting the same product over and over, which later becomes a threat to the business.
ShopUp Assist can give a solution to that. Through the service, an entrepreneur can post product promotion or page promotion on Facebook. Even if you need a credit card for that, ShopUp offers the opportunity to pay through a bKash account.
To accelerate the business, ShopUp has three additional services, Mokam, REDX, and Baki. ShopUp delivers daily necessities to the grocery store in the neighborhood in 24 hours through the B2B business app Moka. For this, the startup has entered into agreements with various product manufacturers, distributors, and wholesalers.
Read Top 10 Co-working Spaces in Dhaka
Apart from that, the products are delivered to the traders through REDX. Launched last year, RedX is currently serving 493 Upazilas. And small traders can buy products on credit through the Baki service.
How did they start raising investment?
Over the last 4 years, ShopUp raised investments in several steps. Their investment came from an Angel round in 2017, and they raised $120k. Next, the company proceeded to the seed round in 2018 and received $1.6 million funding from Omidyar Network, USA.
After that, ShopUp participated in three more seed rounds in 2019 and raised $4.2 million in total. Their second largest investment came in October 2020 from Flourish Ventures, Sequoia Capital India through Series A, and the company received $22.5 million. Finally, ShopUp raised $75 million last week from the Series B round.
Read Angel Investment 101: Is It the Right Track for Your Startup?
How did ShopUp raise $75 million from Bangladesh?
Basically, when a new venture shows good results in the market with initial capital, they become eligible for Series A investment. After that, they can proceed to Series B investment. ShopUp has proved its ability through footprint in all 64 districts in Bangladesh and Bengaluru, India.
As a result, they received $75 million from Series B financing led by Peter Thiel's Valar Ventures. The investment also includes, from "Proses- the investment arm of Naspers, Pierre Omidyar's family office, as well as existing investors Sequoia Capital India, VEON Ventures, and Flourish Ventures." As a Series B, it is the largest investment in any startup based in South Asia.
Read The 7 Most Promising Tech Startups in Bangladesh
Vroom App: End-to-End Platform for Car, Automobile Related Services in Bangladesh
What do you do when your car/ automobile breaks down? Many people become worried about repairing a damaged car in Bangladesh as finding a reliable mechanic or company is troublesome. Again, if the car parts are damaged, many people get in trouble about where to find the original equipment. Keeping these problems in mind a mobile application-based service has been launched to relieve car owners from these difficulties. The name of this app-based service is 'Vroom'.
What is Vroom?
Now you can search for damaged car parts with the smartphone at your fingertips. Further, you can also properly manage the fuel of the car through your phone. Such services have been created by Bangladeshi software entrepreneurs. Mobile application-based service Vroom is providing hassle-free service to car owners.
Vroom is an online car service provider. Its journey started in July 2017 and the company has been successfully providing services for more than four years.
Read Best Car Loans in Bangladesh to Grab Your Dream Car
How did Vroom Start its journey?
A few friends started this service in Dhaka with the aim of providing benefits to car owners. Everyone felt that there needs to be a company that can come home and takes care of the car. With this goal in mind, they started a journey by forming a company. The entrepreneurs involved in creating this service came from different backgrounds and professions. But everyone's goal was to provide the service right and this is how the Vroom was born.
However, the initial goal was to provide home services and establish a network of professional workshops in the country. So, the car owners can take safe service with confidence and guarantee. Besides, car owners could buy original parts at the right price.
Confidence is the key to success for Vroom workers. In the beginning, they inspected 300 workshops before starting the journey and considered only 31 workshops that had the quality in terms of skilled manpower and equipment. With them, Vroom launched an app called Vroom 24x7 on Android and iOS platforms. Home service can be taken through the app.
Read Bangla Car: The First Car Made in Bangladesh
Apart from this, Vroom offers a membership card so that the users get various benefits. Later, fuel cards were introduced for the first drivers in association with Eastern Bank. Drivers can buy fuel without any hassle. The fuel bill is paid on a monthly basis. Hence, this reduces the daily hassle.
Gradually, they have enhanced their services. Vroom didn’t want to be limited to just home or workshop services. For this reason, they introduced the fuel management card. In addition, fleet management solutions have been introduced for corporate customers. The entire service is available on a single screen.
With this software, the corporate customer can know the cost of each of his vehicles instantly. In addition to that, cost management, control, movement issues can be monitored too. This is the advantage of information technology and Vroom brought these advantages.
Read Metro Rail: The Magic Wand to Improve Dhaka's Transport System
Vroom Services
Although Vroom started their journey by home service and workshop service, they have expanded their service into more categories. Currently, they offer 11 services in total. All the services are essential for car owners or future car owners. In other words, you can say that over the last 4 years Vroom has become a one-stop solution for car owners. Following are the details of the services provided by Vroom.
Buy and Sell
Vroom has their very own e-commerce platform for buying and selling cars. New, used and reconditioned cars are available to buy from different sellers and organizations. Selling a car on Vroom is easy as a piece of cake. Anyone can list a car for sale by filling out a form containing car details.
Read Motorcycle Categories: Different Types of Motorbikes Explained
Wash and Polish
Vroom wash and polish service let the car owner take home service instead of sending the car to the workshop. Once the owner sets the schedule, the Vroom team will visit the place and do the wash/polish/oil and filter change or whatever service you want. The fees depend on the service you want to take. You will find the complete list of the service fees on their website www.vroom.com.bd.
Bank Loan
Vroom has a collaboration with Eastern Bank Limited. So, the buyer can submit a loan application right from the Vroom website. After that, the bank will call the applicant for further processing.
Inspection
With the Vroom inspection service, a potential buyer can hire an automobile engineer to inspect a car before making the buying decision. The Vroom specialist will provide an unbiased comprehensive report on the car after the inspection.
Read Motorbike Buyer Guide: Some popular models with price in Bangladesh in 2021
Transfer
The company also helps the buyers to complete the ownership transfer process. Once the selling or buying is finalized, the Vroom team will take all the hassles of the transferring process. However, you will have to provide all the necessary documents.
Workshop
With the Vroom’s trusted workshop partners, car owners can conveniently set a schedule through the Vroom website.
Parts
Another e-commerce platform by Vroom. Anyone can buy the car parts and accessories from the parts section at the right price. You can filter the item according to the category.
Read A Beginner’s Guide to Electric Bikes: Everything you Need to Know
Fleet
With the Vroom fleet management service, users can manage all the cars and track the vehicles. They have a list of the services for managing the cars properly.
Tracking
Vroom offers a well-equipped world-class vehicle tracking system though easytrax limited. Starting from Tk. 2,999, users can check the vehicle on Android, IOS App, and web platform.
Oil and Gas Card
Vehicle owners who are members of the Vroom Service can get the co-branded card facility. Cardholders will have the opportunity to receive fuel at more than 100 fuel stations across the country.
Read Electric Bike vs Regular Bike: Which One You Should Pick?
LPG
Vroom also offers LPG conversion service at a reasonable price. However, the price varies on the cylinder size. You will get a price list on their website.
Apart from these services, Vroom will introduce insurance services for the vehicle owners.
Final Words
A team of 25 people is currently working in Vroom. The company has an aim to expand the service. As per a report in 2019, Vroom had five competitors in the market. But when they started, the market was absolutely unprepared. Now the market is getting bigger and awareness is growing. Vroom is working to achieve new customer satisfaction with more advanced services.
Read Truck Lagbe: Story of a Successful Digital Trucking Startup in Bangladesh
Common Challenges faced by Startups in 2021
With over 150 million startups in the world, the space for standing out in a specific market is becoming more and more saturated every day. About 137,000 startups are being found daily in the world today. This begs the question of whether it really is a smooth sail all around for startups? Do all of them go on to become multi-million-dollar ventures? Surely not. In reality, a startup faces several challenges that can become daunting to overcome. In this article, we will talk about such common challenges faced by startups.
What is a startup?
According to Investopedia, a startup is a company in its first stage of development or operations. These companies are founded by entrepreneurs who want to introduce a product or service in the market based on its demand.
The initial phase of the product or service requires several trials and errors associated with R&D, marketing, business model, and cost of operation. As a result, these companies work as a high-cost- limited revenue venture in their initial stage. To compensate for the high cost, there are different stages of fundraising to ensure smooth business operations.
Read: Seed Fund Raising for Startups: Things to Know About
Top 7 common business challenges faced by the startup founders
High competition
The high number of startup competition across the globe means there are lesser and lesser opportunities for emerging startups. Most markets are already saturated. In addition to competing with existing startups, there is also competition from multi-industry conglomerates.
Whether it’s a B2B or B2C, every startup faces high competition in every phase including seed fundraising and market cap generation. As a result, they are forced to be more aggressive in the market and their strategies.
Read Angel Investment 101: Is It the Right Track for Your Startup?
Lack of Consistency
Every business venture bears a strategic goal with expectations and startups are no different. A positive growth curve shouldn’t give a false sense of expectations. It's important to set realistic goals in the initial phase of any startup.
The initial growth won't be consistent if there is no sustainability. And this is where most startups fail. They fail to maintain consistency in their effort to ensure sustainability. There is no room for complacency and consistent effort is the only deciding factor.
Read: The 7 Most Promising Tech Startups in Bangladesh
Lack of Planning
A startup needs to have a business plan which would outline the expectable and inputs. While most startups have a business plan they often don’t include all the key areas. Many first-time entrepreneurs think that they will plan things as the business progresses but that’s a wrong move.
Key details like R&D, skilled staff, sales, funding should all get equal priority while planning. While faced with an issue, the target shouldn’t be damage control, rather there should be an appropriate plan of action to tackle every issue.
Read The Emerging Logistics Tech Startups, Courier, Delivery Services in Bangladesh
The players
A startup needs manpower. You need to have a working team to run your business top to bottom. Whether it’s your employees or investors, you need to be careful about who you hire and who you get as your investor. Communication, team playing, and skills are important factors to be considered when it comes to hiring candidates. Hiring the right people can be a tricky task considering the sheer number of eligible candidates out there.
What you can do however is thoroughly assess their skillset and mentality. Cross-check whether these are the exact skills you are looking for and whether this can be a long-term partnership. Having an industry-related investor can be a huge advantage in this regard. They might be better qualified in assisting with the hiring process.
Read Digital Healthcare Startups in Bangladesh: An Overview
Financial Factors
Startups are high-cost low revenue ventures in their initial days. Needless to say, the adjustment in this disparity comes from the investors. If you compare seed funding with venture funds, the amount might be small but it still tends to be a large sum. So naturally, there arises the need for financial management.
A startup constantly requires the investment of money until it reaches the growth and scaling phase. Many startups fail to make it to this stage because of a lack of management and cash burnout. In addition to having a business plan, it's important to have a strong financial model as well. Considering the limited resources and fierce competition, financial management is a crucial make-or-break aspect.
Read:7 Local Startups Get Tk 150m Funds from Startup Bangladesh Limited
Scaling up
Suppose your startup has done everything right up until the growth phase. You can expect the customer base to increase rapidly with increased demand for the product or service. This naturally calls for scaling up. However, scaling up isn’t just about adding a few more employees.
You need to consider a lot of factors as you scale up. You need to formulate a strong HRD, look after your supply chain and product sourcing. In addition to that, there is the aspect of widening the distribution channel and revenue management.
Without proper handling, all of these might become too much to keep track of and the business would crumble even before taking off properly.
Read An Overview of Shuttle: A Promising Mass Transit Startup in Bangladesh
Time management
A startup isn’t a one-man thing. As a business grows, there will be a lot of decision-making needs that are honestly impossible for a single person to micromanage. However, many entrepreneurs think that micromanaging is the only way to ensure organizational growth. A micromanager often overlooks key decisions while focusing on lesser important ones. As a result, business growth is hampered.
As startups build teams, it's important to delegate tasks to the team. This not only enables a business to be more proficient, but the time utilization will help a business edge out its growth.
Read: The SWAP story of Bangladesh's first re-Commerce startup
Bottom Line
So far we have discussed some of the most common startup business challenges. While there might be a boom in startups in the world, managing these startups are no easy task. As an entrepreneur, you’ll have to put in a lot of effort. The room for mistakes and complacency is next to zero. Many startups fall victim to these common mistakes we outlined above. A startup should definitely focus on its priorities and end goals all the while preparing to face challenges head-on.
Seed Fund Raising for Startups: Things to Know About
Getting a startup off the floor isn’t easy. Most of the time it starts with an idea. But working with an idea and putting it into work requires funds. The question is where will you get the initial fund? This is where seed funding comes in. In this article, we will look into the details of seed funding and everything you need to secure one for your startup.
What is seed funding?
Seed funding is essentially the first cash inflow in a startup in its initial phase. A startup has several stages. The initial phase is idea generation. Based on the idea, the startup moves into the market viable product. Subsequently, the product or service sees expansion, growth, and maturity phase. While a business can easily get large-scale investment from the expansion phase, there are significant R&D and market compatibility investments that require funding.
Read The 7 Most Promising Tech Startups in Bangladesh
These investments come in the form of seed funding. A seed investor is also known as an angel investor. To know more about angel investment, you can read our comprehensive guide here.
Seed funding is unique because there is no practical proof that the startup will be profitable or scale-able. An angel investor will invest based on the uniqueness of the idea and their experience as an investor.
Almost all the large-scale startups of today had seed backup. The initial money needed to bring the startup to profitability is well beyond the means of its founders. Seed money not only ensures maintenance of business process but also makes sure there are multiple trial and error run for your product and service.
Read:7 Local Startups Get Tk 150m Funds from Startup Bangladesh Limited
Considering the market competition and overall success rate of startups in the world, it's understandable why a startup would not be a single shot thing. Rather it’s about having a tried and tested model to achieve the ultimate goal. Seed fund allows you to try out and test different approaches which would’ve otherwise been impossible.
Things to know before getting seed Funding
The basic groundwork
An angel investor or seed funding is done at the earliest stage of a startup. Most startups that apply for seed fund doesn’t even have a market viable product. To get seed funds, you need to clearly outline your idea. The entire process is nothing but making a potential investor see your vision with the startup.
During the basic groundwork, you need to show potential investors whether the product or service has market demand or not. How will it undercut your competitor? What’s the chance that people will adapt to the product rapidly and how does it solve an existing problem? This simple market research will act as the groundwork for the seed fund approach.
Read The SWAP story of Bangladesh's first re-Commerce startup
Develop Connections
Whether the startup will get the attention of a potential investor depends largely on the word-of-mouth spread of your business. Networking and connection building are equally important to having an impeccable pitch deck. Developing networking and connections will help you come in contact with potential investors and give your startup better exposure in the startup community.
What is the ideal seed amount?
Many startups make the mistake of overestimating their business. As a result, most of them fail to secure funding. Before diving into the details of how much is actually the right amount, you need to understand that there are multiple types of investment.
Read An Overview of Shuttle: A Promising Mass Transit Startup in Bangladesh
There is discounted cash flow which generates a steady inflow of investment rather than a lump sum. There is the market comparable method where the pattern of investment on a similar startup is followed. Then comes the venture capital method where an exit strategy is worked out before investment.
Regardless of the investment, you’re choosing, it’s important to have a proper valuation of your business. Every startup has several investment cycles before it hits the maturity phase. Seed funding valuation is generally less as there is no proven market strategy associated with the product.
Read: The Emerging Logistics Tech Startups, Courier, Delivery Services in Bangladesh
The essential documents
An investor would always look for how organized a startup is. And the first step of organizing starts with the preparation of all the important documents. The documents include a business plan, executive summary, presentation deck, elevator pitch, and the NDA. All these documents are necessary when it comes to securing investment. The more organized you are, the easier it becomes to present your ideas professionally.
Set milestones
Every established business has its own set of strategic and organizational goals. As a startup, you should have your own goals and milestones as well. This is one of the reasons why a strategic business plan is so important when it comes to startups. Your investors will be looking for results from their investments. You need to outline a clear set of milestones to showcase the growth trajectory of your startup. As long as you stick to the milestones, it will help your business grow uniformly and attract investors as well.
Read Truck Lagbe: Story of a Successful Digital Trucking Startup in Bangladesh
Always be ready to scale
We mentioned the cycle a startup goes through in its initial days. Truth is, the seed period of any startup is short-lived. A startup with proper planning and business model will soon be ready to scale. It always starts with a sudden boom in sales or service requests. If you aren’t ready to serve every client proficiently, you stand to lose your reputation in the process.
The increased demand will initiate increased service requirements. So be ready to scale your business with part of the seed funding in the initial stage.
Read Arogga: The Bangladeshi Medicine Delivery Startup Which Raised $200k
Understand what you’ll give up
Seed investments aren’t different from traditional investments considering you will give up a part of your stakes to get the funding. There will be multiple stages of fundraising so you have to be careful how much you are staking out in the seed stage. This will also impact how much control you hold over the startup in its growth phase.
Bottom Line
Seed funding is a necessary and intricate part of any startup. However, many startups die out in their initial phase due to a lack of funding. In this article, we tried to focus on the core aspects that will help you ensure seed funding and control over your startup.
Read: Digital Healthcare Startups in Bangladesh: An Overview
Huawei to invest $100 million in APAC startup ecosystem in 3 years
Huawei recently announced its plan to invest $100 million in startup support at its inaugural Spark Founders Summit, which took place simultaneously in Singapore and Hong Kong.
The investment would go towards Huawei's Spark programme, which aims to build a sustainable startup ecosystem in the Asia-Pacific (APAC) over the next three years, according to the Chinese tech giant.
Huawei has been helping Singapore build the first startup hub in APAC since 2020 and has expanded the programme to many countries in the region in the past year.
Read: Huawei partners to build 5G automobile ecosphere
At the summit, Huawei also announced that this programme would focus its efforts on developing four additional startup hubs – in Indonesia, the Philippines, Sri Lanka, and Vietnam – with the overarching aim of recruiting 1,000 startups, out of which 100 are scale-ups, into the Spark accelerator programme.
Huawei Senior Vice-President and Board Member Catherine Chen said, "We all know how brilliant startups and SMEs are. They are the innovators, disruptors, and pioneers of our times. These companies account for two-thirds of jobs worldwide, create two-thirds of new jobs, and generate almost 50% of global GDP. And 34 years ago, Huawei was a startup with just $5,000 of registered capital."
Read: Huawei to invest $150 million in talent development
"In Asia Pacific, for the Asia Pacific has been our unchanged commitment for the past two decades," said Jeffery Liu, president of Huawei Asia Pacific. "Leveraging Huawei's global customer base and full-stack technologies, the Spark Program will invest over $100 million in the next three years, and provide comprehensive support to build a sustainable startup ecosystem and create new value for the dynamic region."
How to Become an Entrepreneur without Money or Skills?
While many people want to start a business, they don’t know where to start. The intention is there but the knowledge to execute isn’t. Moreover, there is always the looming factor of money and experience required to run a successful business. But what if we told you that you don’t need either of these to get started on your dream business. Sounds too good to be true? Read along to find out.
The beginner’s dilemma
As a young and potential entrepreneur, several factors negate your entry into the business. There are a lot of things that essentially work as a constraint to your initiative. Many people go into business studies with an aspiration to learn about the quirks of business and startups. But the intensive programs of business schools end up feeding more about business processes, rather than how to get started.
Societal pressure is also something that puts constrains a business. Starting a business is like taking a huge leap of faith since there is no guarantee that you will be successful with your venture. The uncertain future of business is also something that deters people from getting into the business.
However, it's always about taking the first step. You don’t have to have a game-changing idea or tons of money to get started. And, you do not require much experience to be an entreprenur. All you need is perseverance and determination to make things work. You won't see success overnight. Rather it’s a continuous process that will come as you progress. Now the question is, what steps should you follow to get started? Especially if you don’t have the money or skills.
Read:The Difference between a Startup and a Small Business
How to get your business started with no money or skills
Think of an idea
This shouldn’t come as a surprise. All the great startup businesses had one amazing idea which they perfected to make a profitable business model out of it. However, those are mostly chance encounters or results of years of market analysis. Considering you're neither lucky nor have the time to read market briefs, you can still work out an idea.
Firstly, think of your daily life. What constraints are you facing? Is there a better way to do it? Is there anything that can ease up the process? This is a great starting point to generate an idea. Most successful startups started from an idea developed from personal constraints. Something created to address a personal issue can also be turned into a business to solve others' issues.
You can also talk with your friends and families to get their input. Follow the emerging startup business trends as they might inspire you to get started on your hustle. Whatever you think of, make sure you can future-proof it.
Read:Angel Investment 101: Is It the Right Track for Your Startup?
Find the product-market fit
Thought of a viable idea? That’s half the job done. Now you have to perfect the idea to make a viable product that can serve your potential customer. This cycle generally starts with developing an MVP or market viable product. You might be thinking, where are you going to get the money to invest in R&D? Truth is you don’t have to. All you have to do is understand your market, look for the demand of your product, identify your potential client base and see whether there is a profit curve or not.
Undercut your competitor
Regardless of the brilliance of your idea, it's almost certain that you will face competition. What you have to do is to analyze their product and undercut them. Find out details about product quality and pricing. Take their product and compare it with yours. Fix all your lacking and put on a competitive price. That way you will always stay ahead in the market.
Read:Investment Guide: How Bangladeshi Youths Can Invest money and Create Wealth?
Develop a plan of action
Remember we talked about developing skills as you go? For that, you need to set up a clear goal for your business. Every business has a clear mission and vision which motivates the company in its growth. Make sure you have a business plan set up so that you can compare your progress and see where you stack up against your goals.
Get a co-founder
Look at all the successful businesses around you. Hardly any of them are the product of a single mind. A co-founder will not only serve as a valuable strategic input to your business but also be a potential investor. This can be a great way to raise some cash for the MVP we talked about earlier.
If you aren’t so keen on the idea of having a co-founder, you can always look for the investor within your family members and friends. This can be a great financing option if you are going with a small business idea.
Read 8 Mistakes to Avoid in a New Ecommerce Startup in Bangladesh in 2021
Crowdfunding
Remember how we talked about an idea to solve your personal constraint? In addition to solving your problem, it can be a solution for a great many people. And that is where crowdfunding comes in. there are a lot of crowdfunding sites where you can showcase your MVP to get investments. Many niche-based businesses use crowdfunding to kickstart their business idea.
Find an angel investor
If nothing else works, you can always look for angel investors. Angel investors are a wealthy bunch of people who invests in an innovative business idea. You can find someone to invest a hefty amount in exchange for equity in the business. To learn more about angel investment and how it works, you can read our blog here.
Read:Saving vs. Investing Money: Know the Pros and Cons
Bottom Line
Money and skills are important to run a business, but it's not the definitive need to start one. While we tried to outline some basic steps to get you started on your dream business, you should still be aware of the risks that come with entrepreneurship. If you are motivated enough, you can be sure to write a successful rag to riches story of your own.
Angel Investment 101: Is It the Right Track for Your Startup?
The startup scenario in Bangladesh first came into existence in the early 2010s. This was a time when Bangladesh was seeing steady growth and increased accessibility all around. There are over 1000 startups in Bangladesh as of 2021 and the number is expected to grow as the country and the economy becomes more digitized. But are there enough funding opportunities for these startups? This is where angel investors come in. Though Bangladesh is yet to achieve a healthy investment ecosystem, angel investment has been playing a key role at the micro-level. Now, what is an angel investment and how do startups stand to benefit from it? Read along to find out.
What is angel investment?
Angel investment happens through an angel investor, that is someone with a considerable chunk of wealth who’s willing to invest in the early phase of a startup. While it's mostly limited to the scope of a single-person investment, there are instances where an investment company acts as an angel investor in startups. The mechanism of angel investment is similar to other forms of investments. Here an angel investor invests a certain lump sum in the startup in exchange for ownership equity.
Read The Difference between a Startup and a Small Business
Angel investor faces a lot of risk in terms of the investment itself. A startup has several phases in its growth trajectory. It starts with an idea which then moves onto an MVP or market viable product. After that comes the growth, expansion, and maturity phase. While most venture investors, banks, and equity firms invest from the growth phase with IPO being exclusive to the maturity phase, the scope of an angel investor is limited up until MVP. The initial investment in the idea itself without any proof of product-market fit increases the investment risk exponentially. As a result, you might have to dish out larger equity for a lower investment.
The data regarding angel investment in Bangladesh might not be enough to give a glimpse into its implication in the startup sector. However, the lower limit of investment can be as low as 0.5 million BDT to upward of several million dollars.
Read Investment Guide: How Bangladeshi Youths Can Invest money and Create Wealth?
What should you look for in an angel investor?
Now you might be thinking what’s there to look for in an angel investor? They are literally investing money in your startup when it’s nothing more than an idea. Compared with the rate of startup growth in Bangladesh, the chance of scoring an angel investor is slim as it is. However, there are still some aspects to be considered to make sure you make the most out of the deal and your investor. Because there are more to angel investing than giving up equity for cash. Here are our top 4 picks to consider.
Industry knowledge
An angel investor should have sufficient knowledge of the investing industry. Think of angel investors as mentors. Someone who has worked in the industry before knows the ins and outs and things to avoid which you won't generally have access to in your starting phase. This will help any startup avoid potential pitfalls. A study conducted by Nesta showed that angel investor investing in a known industry sees a better return on their equity.
Truck Lagbe: Story of a Successful Digital Trucking Startup in Bangladesh
In business, relocation, or many other cases, we often need trucks or pickup vans for transporting or carrying goods. But just like any other thing, trucks or pickup vans become very difficult to find when needed. Apart from this, the issue of renting a truck also becomes painful due to the hassle of getting to and from the truck stand, not getting the known truck drivers, etc. In today's article, we will talk about a service that can provide easy solutions to all such problems. This brand innovative startup to hire or rent a truck is called 'Truck Lagbe.'
What is Truck Lagbe?
'Truck Lagbe' is a smartphone application (App) -based product transport service. The 'Truck Lagbe' App will link the client with the truck owner or truck agency. Through which you can rent a truck from anywhere in the country to move your necessary goods sitting at home.
Its initiators are two outstanding, talented personalities Enayet Rashid and Mir Hossain Ikram. The goal was to improve the quality of life of truck drivers. In addition, to build a bridge between the truck owner or the driver and the service recipient. So that both parties get benefits and time is saved.
Read Top 7 Truck Rental Apps in Bangladesh
They have created the 'Truck Lagbe' App with the aim of bringing the necessary trucks, pickups, and covered vans for transporting goods from anywhere in the country at any time to the reach of the people and to end all the hassles related to it.
Truck owners and service users are also registered through the App. Both parties can know in advance when, where to go or which car needs to transport goods. The App will let you know if the truck driver is delivering the product on time. Besides, the customer will be able to stay worry-free if he takes the service through the App.
Read Uber Adds Auto-Rickshaws in Dhaka: Transportation Aggregation and Competition
How does the Truck Lagbe Start?
Enayet Rashid and Mir Hossain Ikram were two professional friends. The CEO of the company is Enayet Rashid, and Mir Hossain Ikram is the Chief Operating Officer. Although they were interested in doing something completely new and different, they could not easily come up with an idea.
Enayet Rashid, meanwhile, occasionally needed trucks to transport commercial goods. For that reason, some issues came to his notice. Especially the issue of rent. The two friends sat down to discuss the matter again. That's where the 'Truck Lagbe' plan comes from.
Read 8 Mistakes to Avoid in a New Ecommerce Startup in Bangladesh in 2021
The planning and start of 'Truck Lagbe' started in December 2016. Moreover, 'Truck Lagbe' won the 'Startup Challenge 2017' competition organized by the Department of Information and Communication Technology (ICT) of the Government of the People's Republic of Bangladesh. They achieved first place among the total of 20 innovative projects. In July of that year, a trial (beta) version was released for Android users. Then in August 2018, a new version of the App came to the Google Play Store.
In September of the same year, the commercial launch of the App was officially announced at the ICT Tower in Dhaka. Within a year or so of that journey, 'Truck Lagbe' began to gain a reputation as a reliable service provider. Following this, 'Truck Lagbe' won the 'Best Technology Innovation' award out of 16 companies of the country organized by the Bangladesh Brand Forum in October 2018.
Read Visa’s Fintech Initiative for Bangladesh: New Opportunities for Start-ups?
How Truck Lagbe Works?
'Truck Lagbe' works like ride-sharing or parcel apps. But in some cases, it is a little different than others. Unlike other ride-sharing services, it does not take any percentage from the truck drivers. The entire income here belongs to that truck driver or owner. This usually means that when a sender needs a truck, he or she will communicate his or her needs through the App. Then the details of that demand will reach the truck owners in the neighborhood. Interested truck owners or drivers will then offer their desired fare. If all goes well, the sender of the product will be able to rent the truck with that App.
Benefits of using Truck Lagbe
The App focuses on two things to ensure the highest quality of service users. One is reliability, and the other is transparency. 'Truck Lagbe' ensures reliability by finding the right truck for any shipment through 24-hour transport facilities, scheduled service, and in-app special load-matching technology.
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On the other hand, for the sake of transparency, all the trucks found in 'Truck Lagbe' are verified and registered. Besides, they have arranged the verification of all the customers. At the same time, the entrepreneurs of 'Truck Lagbe' are always on the lookout for the lowest possible price for the service recipients.
Current Situation of the Company
Since the beginning, more than 1 million trips have been completed through this App. Initially, the journey started with only 36 trucks and four people. Now there are more than 50,000 trucks and over a dozen workers in the Truck Lagbe's network. Last year, a three-story office was also rented in Mohakhali.
Read The SWAP story of Bangladesh's first reCommerce startup
Who Can Use the App?
Anyone can be a customer of the 'Truck Lagbe.' In this case, you need to download the App. Then you can get this service at home anytime by logging in to the App and providing the required information. Customers can even bargain about the offered price by the drivers.
However, if you are the owner or driver of a truck, you have to register. Moreover, the authorities provide necessary training to the truck drivers in this regard. This service is available even if there is no internet connection. In that case, one needs to call the Truck Lagbe's official number.
Read Entrepreneur Vs Wantrepreneur: 8 Ways to Tell Them Apart
Not only are the customers benefiting from this service, but also the truck owners or drivers can easily find their customers. Further, trucks have to travel long distances, even to remote areas of the country, to transport goods. But since there are no new customers, or there is not much acquaintance with the locals, they have to bring empty trucks on the way back. As a result, labor and money are wasted.
But now that the Truck Lagbe service is available online from any part of the country through the App, drivers can get a new customer in new places. Just as they are getting the opportunity to earn some extra income, the truck owners are also gaining instead of losing. Overall, the Truck Lagbe is making life easier for the truck owners, drivers, workers, and service recipients.
Read 20 Most Promising Education Start-Ups in Bangladesh
8 Mistakes to Avoid in a New Ecommerce Startup in Bangladesh in 2021
A recent study showed that almost 40% of the eCommerce transactions in the world happen through Amazon and more than half of all the startups in any category fail. The truth is, it's never easy to run a successful eCommerce startup considering the risk involved.
Amazon doesn’t operate in Bangladesh and even though there are successful eCommerce sites in town so it’s possible here. In this article, we will look at some of the beginner's mistakes that one should avoid in new eCommerce platforms.
Not getting things Down to a Niche
Unless you have an angel investor to back you till it reaches a break-even point, it’s almost impossible to succeed with a broad range of products. Narrowing it down to a specific niche product/consumer group is critical. Broadening the niche requires higher volume of communication to the client base which is never easy. It means one is competing with the existing and often established market players. The best course would be to focus on a specific niche to build customer loyalty as well as brand image.
Also read: Potential of e-commerce hemmed in by bottlenecks
Poor UI/UX design and Navigation
Before assessing the product of the platform, a client first interacts with the website itself. if the design of the website is not of quality and the navigation complicated, visitors would be discouraged to be there. The best thing is to hire a professional web developer to ensure a quality, responsive and sales facilitating site.
Lack of Product Research
Let's say you are passionate about skiing. You love everything about skiing and would like to sell skiing products on your website. However, given the climate of Bangladesh, it is pointless to sell skiing materials as there is virtually no demand for snow gears. A lack of demand means your product won't sell, no matter how good it might be. So it's better to conduct proper market research on your niche before listing products on your website. Understand what the customer wants and then act on it.
Read Visa’s Fintech Initiative for Bangladesh: New Opportunities for Start-ups?
No Marketing Strategy
An eCommerce platform isn’t like a normal business where you open an offline shop and wait for customers to arrive. You need to promote your platform so that people get to know about it and the product. One problem with eCommerce startups is that they focus on the product and the platform, but not enough on the marketing strategy. You need to create a concrete marketing strategy to attract customers and convert them to sales.
Undercutting or Overdoing
The key to a successful eCommerce platform is its simplicity. As long as a user feels at home on your platform, they will end up making purchases. But keeping things simple doesn’t mean you will underserve your customer. This might often happen with a lack of product description or poor product photography as well as a lack of customer engagement mechanism.
There are also instances of overdoing with too much information that confuses the customer or overselling a product. Focus should be to create an amicable environment for the customers.
Read The SWAP story of Bangladesh's first reCommerce startup
Failing to Add Value
If your business strategy only revolves around selling products and not creating value for your customer base, there's a high chance that you won't be able to retain these customers, ultimately depleting your business potential. Focus on personal interactions and relations with the customers to better understand what they require and sell products that will bring value for them.
Failing Back-Up Product Claims
Your product is only as good as its reviews. You can make bold claims on your platform regarding a certain product but if it's not backed up by sufficient reviews, it's not much good. You should incentivize your customers to write reviews on the platform to make the purchasing process easier for the next customer. A unified review scale across product denominations will help to better certify your platform and increase its reliability.
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Not Defining Correct Metrics
A common mistake of beginners in the eCommerce platform is that they may tend to look at the wrong metrics to define the success of the platform. For example, an eCommerce platform might exclusively focus on driving more and more traffic to the platform but that isn’t a success unless the traffic is converted to sales. The best way would be to reduce acquisition costs and convert the sales to profit.
Bottom Line
As a startup eCommerce platform, the margin of error is very small. You need to make sure everything that you do, aligns with the overall business goal of the startup. It's very easy to make these rookie mistakes. Make sure that you follow the best practices to ensure the success of your eCommerce platform.
Read 20 Most Promising Education Start-Ups in Bangladesh