The third edition of Bangabandhu Innovation Grant (BIG-2023) competition launched last week to inspire and empower our startups as they are too young to invest. The best 51 startups will be given a total of Tk6 crore as a grant to make the business. BIG, the platform for ICT-based innovations, welcomes applications from anyone (Bangladeshi Citizen) with a unique idea, product, or service until April 22.
Following the discussion, it is so far cleared that the nominated startups can make their dream successful through BIG. But many people still don't have a clear idea about startups. Naturally some questions are popping up in your mind. What exactly is a startup? Why are startups different from conventional businesses? Why does the government help them?
What is a startup?
Startup has been a popular term in developed countries since the 1990s. However, people in Bangladesh are gradually aware about startups since last decade after the announcement of Vision 2021 in the election manifesto back in 2008 by Bangladesh Awami League to build a Digital Bangladesh. Since that, the idea of startups came to the fore.
A startup refers to taking an initiative based on a unique idea that solves a problem in people's daily lives or makes a task easier by reducing time and complexities. Technology will be used to make the initiative successful so that entrepreneurs can grow the business very quickly. For example, you used to have to stand in long queues to pay various utility bills including electricity bills, now you can easily pay bills through Nagad or Bkash at home or office.
Speaking of, Nagad and Bkash are two of the most successful startup companies in Bangladesh. The advantage of startups is that this business expands at rocket speed due to technology. For example, the Ford Motor Company started its car business in 1903, but how many people know this name, especially countries like Bangladesh? But the US-based startup Uber (online ride sharing platform) is celebrated around the world, which started business a hundred years after Ford and which today has become a billion-dollar company like Ford. Similarly, Pathao has achieved rapid success as a Bangladeshi startup.
What is the difference between a startup and a conventional business?
Consider the example of Ford and Uber again. It took many decades for Ford to become a giant company. On the flipside, Uber has reached hundreds of cities around the world in just a few years. This means that startups grow faster than conventional businesses. However, the core profit-making process of a startup is similar to that of a conventional business.
A conventional business produces goods or services that are sold at a price higher than the cost of production. That is, in the business model, buying a product or service and selling it at a relatively higher price is the essence of business. The difference between this purchase and sale price is profit. The net profit of the entrepreneur is what remains after deducting all expenses including business management from the profit.
Marketing and sales policies are formulated to increase these profits. Various research and innovations continue to expand the business. These processes are also adopted in startups. The difference is tactical. Here buyers, sellers, authorities, and other stakeholders are connected virtually with the help of technology. As a result, there is less longevity here. Millions of people can join quickly and so a business grows rapidly.
This is called rocket growth.
Where a conventional business would take 40 to 50 years, a startup takes four to five or a maximum of eight to 10 years. For example, giant business groups like Ispahani or ACI were created in 40/50 years. On the other hand, only four-year-old startup Nagad is well-known to everyone by now. In just a few years, Bkash has become a billion-dollar company. Founded in 2018, ShopUp has already received an investment of around Tk1,000cr. ShopUp, the largest startup company that solves all problems related to domestic small and medium businesses, has been included in the annual list of the world's best innovative companies in the Fast Company magazine this year.
One thing that becomes clear here is that just as a startup business solves a problem in a new way using technology, so does a conventional business. But the difference is the timeline for achieving targets or achieving success. In general, achieving rapid growth and expanding the business is the most important aspect for a startup.
Even a decade ago, Bangladeshi policy-makers did not have a clear idea of startups. The young generation is leaning towards startups due to the activities of our burgeoning IT sector, which has opened new doors for the country's economy in addition to increasing employment. This year the Bangabandhu Innovation Grant 2023 will be awarded to one of the best startups. Additionally, there will be various opportunities for startups including the facility of getting investment. That is, the best 51 startups will be given a total of Tk6cr as a grant. Not only that, the best 51 startups of BIG 2023 will be given special certificates of appreciation.
This is how the government is supporting startups. BIG has become a source of inspiration for startups.
Easing life
There were nearly 300 applicants in the first edition of BIG. Over 7,000 young people registered in the second edition. They have tried to figure out technology-based solutions addressing various problems. It is natural to think that there will be more response from young people this time. This is because there is no dearth of new generation talent. With the help of the government, they will invent more new things to deal with the economic crisis -- this is the reality now. The government has not only extended financial support to the startups, but is also providing all the supplementary support to make their ideas a success.
A very good news for us, Bangladeshi startups have already received significant amount in funds from India and Singapore. Due to Bangladesh's current demographic dividend, it is through these young people that new technology-based solutions will open up. Therefore, the youth should be supported by the government in order to fulfill our dream of making Smart Bangladesh by the year 2041.
Shohel Mamun is a freelance journalist.
