Success story happens after multiple failures

Pathao CEO and co-founder Hussain M Elius shares the mantra of his success with The Independent

Travelling through traffic-congested Dhaka on a motorbike is probably the best option for reaching from one place to another. This is why the motorbike ride-sharing app Pathao has witnessed a meteoric rise in the capital in the past few years. Although Pathao now enjoys almost 80 per cent of the market share, it is yet to receive permission from the government to operate in the country. Like the market leader, all other ride-hailing services are currently operating in the country without any licence or government permission. Hussain M Elius, CEO and the co-founder of Pathao, has just been named one of the two Bangladeshis in the Forbes 30 under 30 Asia list of 2019. The Independent talked with this young entrepreneur with a Midas touch to learn the secret behind Pathao’s success.

TI: At a very young age, you have been able to make Pathao a successful brand? How?

Elius: Pathao is not my first venture. I had tried four other businesses, but those didn’t click. People only learn about the success story, but they are barely aware of the fact that success comes only after enduring multiple failures.

We started Pathao as a parcel delivery service. During that time, the

e-commerce scene in the country had started to pick up and so the demand for parcel delivery increased manifold within a short span of time. This gave us the opportunity to scale up our business.

We used to make our parcel delivery through motorbikes. This sparked the thought that we could create a platform to ferry people from one place to another place on a bike. It was not  nothing new as the service is already available in countries like India, Indonesia, Thailand and others. But in Bangladesh, it wasn’t tried at that point.

At first, we started small. We only had five bikes. Everyone would call my personal number and I would schedule the rides in an Excel sheet. It was a completely manual operation. It was tedious. Everything changed when we launched our app in December 2016. That’s when things kind of blew up, and we ended up changing our entire business model around our app.

 TI: What happened after you launched you app? How did you convince bikers to join your service?

Elius: We did not have any engineers when the app was first launched. The first iteration was built by me and Pathao co-founders Adnan and Fahad. The app allowed for an immediate response. Along with developing the app, we rolled our sleeves and got down on the ground.

We pushed our customers from the ground level. Since we addressed a need in the market, our service quickly got product-market fit and expanded. We launched the service across Dhaka, believing that everyone should have this service. And we have received tremendous response from the market. This idea of making a product for a large group of people and making sure that there are no entry barriers for customers is critical in an emerging market.

TI: Do you think Pathao has been able to change the way of commuting in Dhaka? Also, how do you ensure quality control?

Elius: I believe that with Pathao, our most significant success was not creating a new technology, but rather a new category of transportation— “motorcycle sharing”—in the country. You have to understand that Dhaka was not a motorcycle-friendly city in comparison with other cities in the region.

The culture of sharing rides or taking a motorcycle was not perceived to be safe. Before Pathao, the city had a preconceived notion that motorbikes were unsafe. Furthermore, people in Bangladesh are not very open to the idea of apps in general. Things have changed after they witnessed the acceptability and success of Pathao.

For quality control, we take the traditional approach as per which continuous feedback is used to weed out bad drivers or customers. You will have bad customers who will decrease the platform experience for the drivers as well. Our rating service provides a data-driven solution. When a first-time driver or customer uses the app, we do not have any data points. Once they start exhibiting consistent behaviour, we can develop a pattern and then choose to fix it or remove the problem.

TI: In Bangladesh, it’s very hard to get funding for starting a tech business as the traditional lending arms, such as banks and NBFIs, don’t want to fund a new start-up. So what will be your advice to aspiring new start-ups?

H.Elius: Let me tell you one thing, banks and NBFIs usually don’t fund tech startups anywhere in the world. These traditional lenders have lots of limitations within their organisational structures to fund these types of business.

This is because a tech business usually starts with an idea and initially an idea doesn’t have a value to everyone. Banks and NBFIs keep the money of common people and lend it out to a business after evaluating the possibility of financial returns and the collaterals the potential borrower is willing to mortgage to them. A young aspiring tech entrepreneur simply doesn’t fit the bill here.

Tech start-ups are funded by venture capitalist firms that understand the risk and are willing to take it for the sake for equity in a business. There is every possibility that if a VC firm invests in 10 businesses, nine might fail and one click. But that one business might be good enough to bring profit for the firm. In Bangladesh, the VC culture has started in a very small scale. The more it expands, the better it will be for the tech start-up scenario in the country.

Success story happens after multiple failures

Pathao CEO and co-founder Hussain M Elius shares the mantra of his success with The Independent

Travelling through traffic-congested Dhaka on a motorbike is probably the best option for reaching from one place to another. This is why the motorbike ride-sharing app Pathao has witnessed a meteoric rise in the capital in the past few years. Although Pathao now enjoys almost 80 per cent of the market share, it is yet to receive permission from the government to operate in the country. Like the market leader, all other ride-hailing services are currently operating in the country without any licence or government permission. Hussain M Elius, CEO and the co-founder of Pathao, has just been named one of the two Bangladeshis in the Forbes 30 under 30 Asia list of 2019. The Independent talked with this young entrepreneur with a Midas touch to learn the secret behind Pathaos success. TI: At a very young age, you have been able to make Pathao a successful brand? How? Elius: Pathao is not my first venture. I had tried four other businesses, but those didnt click. People only learn about the success story, but they are barely aware of the fact that success comes only after enduring multiple failures. We started Pathao as a parcel delivery service. During that time, the e-commerce scene in the country had started to pick up and so the demand for parcel delivery increased manifold within a short span of time. This gave us the opportunity to scale up our business. We used to make our parcel delivery through motorbikes. This sparked the thought that we could create a platform to ferry people from one place to another place on a bike. It was not nothing new as the service is already available in countries like India, Indonesia, Thailand and others. But in Bangladesh, it wasnt tried at that point. At first, we started small. We only had five bikes. Everyone would call my personal number and I would schedule the rides in an Excel sheet. It was a completely manual operation. It was tedious. Everything changed when we launched our app in December 2016. Thats when things kind of blew up, and we ended up changing our entire business model around our app. TI: What happened after you launched you app? How did you convince bikers to join your service? Elius: We did not have any engineers when the app was first launched. The first iteration was built by me and Pathao co-founders Adnan and Fahad. The app allowed for an immediate response. Along with developing the app, we rolled our sleeves and got down on the ground. We pushed our customers from the ground level. Since we addressed a need in the market, our service quickly got product-market fit and expanded. We launched the service across Dhaka, believing that everyone should have this service. And we have received tremendous response from the market. This idea of making a product for a large group of people and making sure that there are no entry barriers for customers is critical in an emerging market. TI: Do you think Pathao has been able to change the way of commuting in Dhaka? Also, how do you ensure quality control? Elius: I believe that with Pathao, our most significant success was not creating a new technology, but rather a new category of transportation motorcycle sharingin the country. You have to understand that Dhaka was not a motorcycle-friendly city in comparison with other cities in the region. The culture of sharing rides or taking a motorcycle was not perceived to be safe. Before Pathao, the city had a preconceived notion that motorbikes were unsafe. Furthermore, people in Bangladesh are not very open to the idea of apps in general. Things have changed after they witnessed the acceptability and success of Pathao. For quality control, we take the traditional approach as per which continuous feedback is used to weed out bad drivers or customers. You will have bad customers who will decrease the platform experience for the drivers as well. Our rating service provides a data-driven solution. When a first-time driver or customer uses the app, we do not have any data points. Once they start exhibiting consistent behaviour, we can develop a pattern and then choose to fix it or remove the problem. TI: In Bangladesh, its very hard to get funding for starting a tech business as the traditional lending arms, such as banks and NBFIs, dont want to fund a new start-up. So what will be your advice to aspiring new start-ups? H.Elius: Let me tell you one thing, banks and NBFIs usually dont fund tech startups anywhere in the world. These traditional lenders have lots of limitations within their organisational structures to fund these types of business. This is because a tech business usually starts with an idea and initially an idea doesnt have a value to everyone. Banks and NBFIs keep the money of common people and lend it out to a business after evaluating the possibility of financial returns and the collaterals the potential borrower is willing to mortgage to them. A young aspiring tech entrepreneur simply doesnt fit the bill here. Tech start-ups are funded by venture capitalist firms that understand the risk and are willing to take it for the sake for equity in a business. There is every possibility that if a VC firm invests in 10 businesses, nine might fail and one click. But that one business might be good enough to bring profit for the firm. In Bangladesh, the VC culture has started in a very small scale. The more it expands, the better it will be for the tech start-up scenario in the country.