A Crash Course on Startup: Key Takeaways from BASIS Softexpo 2023 Startup Conference.

"Unless the “Startup” is your product, and the “investors” are your customers, you must focus on building a product that the users will love, and a business model that can sustain."

Okay, I just made up the quote after writing the draft of this article and put it on top to get your attention.

As founders, we always seek resources to help us build our businesses. We look for video lessons, talks, or interviews of international founders, startup gurus, or investors to learn how we can make a perfect startup and, for some, how to raise money for the business. The Startup conference at BASIS Softexpo was such an exciting session for the founders where we could get answers to many questions. Of course, we? may have heard some of the information or tips several times. Still,? the entire session was an excellent collection of advices and reality checks for startups, irrespective of their current stages.

I could not stop myself from writing down the best pieces from the session for my future reference and for other founders who may not have a chance to go through the whole session recordings.

I will write in a reverse sequence of the actual session, where I would like to highlight the key features of a startup or business. The Fire chat session with Ashneer Grover, Founder of BharatPe, hosted by Ayman Sadiq, Founder of 10 Minute School, was the conference's highlight. And where we find Ashneer saying,

“Don’t do it for Fashion”

Often, founders start doing business just because they have seen others doing it. Probably they have seen a lot of founders raising million-dollar investments, which gives the idea that there is a lot of quick money if you do a startup. To be a real founder, someone must have a strong connection with the problem and continuously build a solution that the user will love. Ashneer also added that for a founder, initially, life is going to be challenging, and for a certain time, the business may not generate sufficient money. The founders must have resilience during this period and build the business and have the mindset to bear at least two years of failure. If someone does it for trend's sake, they will eventually fail and step out.?

“Finding the right Co-founder”

While building a startup, finding a co-founder is sometimes tricky. Those who start as a group, as we did with Light of Hope and ToguMogu, are sort of lucky. But in many cases, it starts with one person's idea and there is dire need of co-founders. Even Superman needs Justice League to solve bigger problems. Ashneer’s tip about finding a co-founder is to look for complementary skills. If a co-founder can bring additional skills to the table, then it makes a better combination. Otherwise, if multiple co-founders have the same skillset and both are doing the same thing in the company, there is a high chance of conflict or less efficient progress.?

“Raising Fund when it is needed”

Raising funds should not be the primary goal of any startup. Ashneer made it clear in his session. The founder must focus on building a good product or solution. When we see other people getting funds, we feel bad that why we did not get funded yet, and that create more focus on raising fund than building good business. But actual businesses are not built on investors' money. It's better to develop products that customers are willing to pay for. If customers are not willing to pay for your product, no external funding will help the startup.

He mentioned that raising funds is also a liability. He added

"Practically investors do not bring anything to the table except for funds. The founders are the ultimate executioner."

So raising funds also means you have to respond to many demands that may not be aligned with your primary vision. Fund is vital for growth but should come once you have built a good business. Otherwise, it will eventually become a burden for the startup.

Many resources are available on how to prepare for raising funds. Founders should do a basic study on how to make a pitch deck, and how to communicate with investors and potential partners. The rest of the part is having continuous relationships and proving that you have a solid business. As Rahat Ahmed from Anchorless Bangladesh mentioned, founders should take time to raise funds. They should prepare themselves and take the best deal.??

Before Ashneer and Ayman’s session, there was a panel discussion about raising funds. The discussion moderated by Adnan Imtiaz Halim, Founder & CEO, of Sheba Platform Limited, as industry experts and seasoned investors, including Mirza Salman Hossain Beg, Co-Founder & COO of 10 Minute School, Fahim Ahmed, CEO, of Pathao, Ahmed Jawad Yusuf, Advisory Lead, Bangladesh Angels, and Mohammad Oli Ahad, Managing Director, Intelligent Machines Limited.

The key takeaway is the fundraising journey is different for each startup. As the investment scenario has changed in the last few years, investors are looking for startups building genuine products that will bring profitability sooner for financial sustainability.

The following illustration is a good analogy to clear the concept of building a startup and raising funds. Growth will come after you achieve market validation of your product. Product Market Fit (PMF) is an ongoing journey but without having no hint of it, spending money on marketing, branding will only incur more losses for the company. Whatever funding comes in, need to be spent on product development and improvement.?

And that led us to the interesting debate session on Profitability vs. Growth just before the panel discussion. Waseem Alim, CEO and Founder of Chaldal and Sadia Hoque, Founder of ShareTrip were representing the growth team. Fahim Mashroor, Founder of Bdjobs.com, and Biplob Ghosh Rahul, Founder & CEO of eCourier Ltd were in the 'profitability' team.

“Profitability vs Growth”

The key takeaway from the session can be summarized in the following bullet points

• Sadia apa said she believes 'growth' defines a startup and justifies raising funds if there is no growth. Startups do not operate like traditional businesses, therefore, growth is a very integrated part of becoming a startup.
• Wasim bhai also agreed that growth defines how a startup fundamentally operates, but growth should have a vision for profitability. It may not come at a very early stage; even looking for profitability may stop a startup from being innovative and trying new things. Growth should not be like cancer cells. It should be supervised and bring good governance into the system.
• Fahim bhai was focusing on profitability, where he tried to alert the founders about the possible failure in the future if founders focused too much on growth. He also mentioned that ultimately without profitability, it is not a business. Fahim also pointed out that when founders focus on only growth, they spend too much on customer acquisition and marketing, which needs to be clarified at a later stage.?
• Biplob bhai from eCourier added that sometimes too much growth creates financial instability, eventually becoming a survival issue.

Apart from the debate session above, all other panelists in other sessions also emphasized balancing between growth and profitability. At the initial stage, it is always about achieving Product Market Fit (PMF). When a startup finds PMF, it naturally grows exponentially. And the investment amount in the early stage should be spent to achieve PMF, not on CAC or Brand Marketing.

Fahim Bhai from Pathao mentioned that Pathao has focused on profitability and is now cash positive. Which is encouraging progress for the Bangladeshi start-up.

Ashneer also focused on profitability in his interview. He mentioned that it would not make sense while representing growth if the loss also grows exponentially with user growth. So it is about estimating that timeline for growth and profitability to converge. This article by Pete Flint can be a good read for the founders to know more about balancing growth and profitability.

There was a question from the audience: what is the sweet point of this balance? When the founders understand whether this is the right time for growth or profitability is a complicated scenario, and it depends on time and economic situation. Wasim bhai mentioned the philosophy of Bill Gates, who focused on sustainability of resources for one year, and then he focus on innovation. Wasim bhai said he follows the same theory. And other panelists also agreed on Wasim’s final remarks.

I want to summarize the event from my personal perspective. The founders must focus on making a product that users love. That means the focus will always be to achieve PMF. To reach PMF, a startup may need funding for product development, technology implementation, skilled resources, and investors always evaluate the value of the solution and the mindset of the founders. If the product gradually improves, there should be growth. And as soon as it reaches PMF, it will automatically drive growth, and that will also drive profitability. And when you build a good product and a good business model, it will also make raising funds easier. You may read this article from Gigi Levy-Weiss about product market fit.

Ivdad Ahmed, Managing Director, LightCastle partner, shared a quick presentation? highlighting the startup and fundraising scenario, explicitly focused on Bangladesh.

Sami Ahmed, Managing Director of Startup Bangladesh, gave the inauguration speech. Startup Bangladesh was started in 2021, backed by the Bangladesh Government. The government has the vision to create five startups with billion-dollar value by 2025. They have already invested in 27 startups and ten other deals on the way. He also mentioned the priority segments- Artificial Intelligence (AI), Cyber Security, Semiconductors, and Robotics, which Startup Bangladesh focuses on.

I hope this article will help founders to make strategies for both growth and profitability and implement them in their business model. I wish to write more article on these topics and if you want to get them in your inbox, please subscribe to my email list.

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