After beginning operations in February 2016, the company currently has the nation's widest cash-on-delivery coverage and handles the biggest volume. The founders and senior management of Paperfly have a track record of success in the nation's top corporations and have joined forces to transform the local logistics industry.
Paperfly provides doorstep delivery, warehousing, intelligent return management, and cash collection facilities for its online retailers. The startup operates in 100 delivery locations around the nation with more than 1,000 employees.
Humaira Afreen interviewed Shahriar Hasan, founder and CEO of Papefly, to learn about their entrepreneurial journey, Tk 1.0 billion investment from Indian Ecom Express, and strategies that led to building a leading startup in this country.
Question (Q): What was the inspiration behind establishing Paperfly?
Shahriar Hasan (SH): In the very early stage of my career, the kind of impact I created drove me. I have worked in BAT (British American Tobacco), and telecom companies, and whatever I did it created a certain level of impact. I realised e-commerce is going to be the industry that will touch millions of lives. As a founder, I started to take off to create a bigger impact, creating my own legacy and solving a really big problem. Back in 2015, I started to think about e-commerce and I realised the impact it created abroad. I could see that business get stuck because of logistics. We thought that logistics would solve the original problem.
Q: What are the fundamental values that drive Paperfly's strategy?
SH: E-commerce is a vast platform that empowers SMEs. If the logistics work better, this will drive the economy itself. I have learnt from my career that experience is overrated, up to date and passionate people actually bring in innovation. What I really love about my Paperfly team is that along with the necessary experience, they also have the passion and adventurous mindset to try out new things. This combination is necessary for success.
Q: What strategy helped Paperfly to succeed?
SH: A startup has two journeys, one in the beginning and one after it has been established. Typically, a startup drives value rather than profitability. In the beginning, when a startup doesn't get proper investment, in that period what helped Paperfly was not going for crazy projects. Instead, we kept a very close eye on profitability. For that, we kept our profile low until last year. Now we came out of that strategy. That strategy worked for us in the beginning but now it doesn't have much use.
Q: How were the effects of Covid-19?
SH: Our operation was closed for 11 or 12 days during the pandemic. From the national perspective, the supply chain dried up and the expenses went up. The cost increased because of restricted movements of people and vehicles. We had to manage the extra cost because a seller is already not in a good state. However, e-commerce started to flourish and we started to get a lot of requests. Bangladesh government was very supportive at that time and all the logistics companies were given the pass to move. Demand wise it really went through the roof but the challenge was managing the cost. However, profitability was not high temporarily because of the high costs. In the long run, it helped us to make the general people understand why e-commerce is important.
Q: What are the metrics to measure success?
SH: Like any commercial company, shares are seen as a success. In logistics, we judge ourselves through business opportunities. In the startup arena, the overall market share is 1.0 per cent. Our startup ecosystem is not mature yet and it is still developing. So, within that 1.0 per cent, winning out the shares cannot be the only thing. That is why even after incurring losses, I kept on the delivery to make the industry flourish overall.
Q: Can you tell us about the traction to date and growth of the startup?
SH: In our country, if you want to see more unicorns, the market size needs to be improved. Google has talked to us and is trying to understand which startup has the potential to be the next unicorn. The traction for me would be, winning out the B2C (business-to-consumer) arena in e-commerce, solving the problems, and creating a mark all over the nation. We have already entered the traditional cargo industry, in the last 50 years, there haven't been many changes made. Since last year, we have started to look at B2B (business to business) as well. The next big thing would be the taste of home delivery across the nation.
Q: How was Paperfly's fundraising experience?
SH: Startups look for investors and not loans because startups solve a problem and they aren't sure whether it would turn into profit. For funding for a startup, you need to convince a particular group to invest not in the company but also in the founder. For a country like Bangladesh, you have to sell the potential and the growth opportunity of the idea and also the risks of it. My previous work experience really helped me because I dealt with international clients and critical incidents.
For me, a strategic investor was more suitable than venture capitalists or VCs because a strategic investor focuses on the growth of the startup. Ecom Express does the same business in India, they understand the business. They looked for someone in Bangladesh with whom they can work with. We chose Ecom Express instead of investors from Singapore and Bangladesh because of the similarity between our businesses. There is no right or wrong answer. So far, my journey has been wonderful because investors love Bangladesh.
Q: Can you share top three tips for other entrepreneurs?
SH: An entrepreneur should solve the issue properly before scaling. Sometimes founders make a prototype and after getting the investment they immediately go for scaling. You might need to scale beforehand and that's not a problem. However, my suggestion is to solve the problem first.
Founders tend to glorify their ideas, claiming them unique to their own. However, in this highly communicative world, no idea is really unique. The idea itself would soon lose its novelty in the long run. You can really solve any problem and make a startup out of it.
Typically, founders worry about their share in the company. Elon Musk has a share of 4.0 per cent or less, Ecom Express founder has less than 10 per cent in the company and even my share in the company is getting low. However, this should not be an issue because you are supposed to lose the number of shares as the startup grows. Rather than focusing on the shares of the company, focus on solving the problems and scalability.
Humaira Afreen is a startup enthusiast.