Amidst the dismal realities of a weak infrastructure, capital constraints, political unrest and red tape in Nepal, a new breed of entrepreneurs--many of whom are trend-setters--are springing into action. They are challenging age-old stereotypes that starting innovative businesses in Nepal is cumbersome and perilous. Those who are part of this wave of startup entrepreneurship are either focused on creating a specialised niche within a certain industry or exploiting market inefficiencies to deliver solution-oriented products.
Startups are generally characterised as businesses with innovative products, a rapid-growth potential and a business model that can be scaled up and replicated. Trailblazers are not new to the Nepali business climate: while they have been few and far between, many in the bygone years were initiatives by seasoned entrepreneurs and business establishments. However, the types of startups that have emerged over the past decade and the factors that have enabled them mark a departure from the past.
As a substantial number of startups that have emerged in recent years have been tech-oriented, many associate startup companies with the information technology sector. However, startups are emerging in a number of industries, including electronic commerce, organic farming, tourism and health care, to name a few. What’s more, these ventures are increasingly being initiated by young entrepreneurs and those with little to no background in business. A growing number of startup entrepreneurs are fresh graduates or returnees from abroad.
Grepsr is a two-year-old startup that specialises in web-crawling services. Based in Nepal, the company caters to a global clientele comprising Twitter, Credit Suisse and Target, among others. Subrat Basnet, co-founder of Grepsr, says that he and his business partner, Amit Chaudhary, were simply “jumping into the global bandwagon” that sought to capitalise on the growing world-wide demand for data- extraction services when they built a web-crawling platform at the outset. However, says Basnet, the company’s transparent and customer-friendly web-crawling interface distinguishes it from other web crawlers in Nepal and abroad competing for global customers. He says that a strong portfolio, as well as its streamlined services, gives Grepsr an added competitive edge over other providers, many of whom are freelancers. “Our customers are shocked when they find out that we are a company based in Nepal. They expect to hear that we are from Silicon Valley,” says Basnet. The fact that the company is entering a joint-venture with a US–based company and is planning to add services such as data processing and analysis, speak of its success and drive to keep innovating.
Information technology based companies like Grepsr, which operate out of Nepal, are able to delivertop quality services at globally competitive rates primarily due to the comparatively lower costs of operation in Nepal vis-à-vis other parts of the world. That’s how the Nepali tech companies got into the global game in the early days. But unlike in the past, when many IT companies worked through intermediary companies to secure outsourced work, today, startups such as Grespr work directly with clients, rather than through middlemen, allowing them to receive full credit and renumeration for their work.
The new breed of tech-savvy innovators is also starting to find new ways to make forays into the local market. Sastodeal, a startup in the e-commerce industry, specialises in providing a variety of products at discounted prices. The founders, a group of youngsters in their twenties, saw that they could carve that niche by improve the shopping experience of Kathmandu residents; they saw that an online marketplace that offered competitive deals was an efficient alternative for shoppers to the in-store experience, sparing shoppers the trouble of having to navigate Kathmandu’s traffic-clogged streets--to hunt for bargains at a dozen stores. The company currently hosts around 300 active merchants and has more than 15,000 products up for sale. It wasn’t easy going at first, though: co-founder Amun Thapa says that initially it was very difficult to convince people about the perks of making online purchases. “The physical marketplace has always been our main competition. But we know we are helping to build an online shopping culture in Nepal because our customers keep coming back to us for more.”
The rapid increase in online marketplaces in Nepal over the past decade has been largely a response to the surge in internet use across Nepal, the globalisation of commerce and a growth in a population that has been abroad, whether for work or education.
Many of these companies are modeled on global e-commerce giants such as Amazon and ebay. While not all of them have been success stories, the ones that have stayed in business attribute their success to understanding the Nepali market well, rather then simply emulating global models. Sastodeal’s Thapa says his company has understood that both quality and bargain prices are top priorities for Nepali shoppers.
Sastodeal thus essentially functions as a marketing platform for suppliers, by putting their products on display at heavily discounted prices. Its model seeks to provide a win-win situation for all: suppliers expand their clientele base through online sales, Sastodeal earns a commission on the sales made, and customers enjoy great deals without having to hit the streets. For Sastodeal, the risks are comparatively minimal too, for their inventory costs are negligible as they source their products from suppliers only after orders are placed.
[transition]“The success of a startup depends more on the business strategy, patience and drive of the people behind it, than simply on an innovative business idea,” says Vidhan Rana, founder of Biruwa Ventures, an incubation centre for startups. “A lot of people point to capital as a major constraint, but if you have the willingness to do business, you will figure out a way to make it happen,” he adds.
Live Fish House, a pioneer in Kathmandu’s live-fish industry, exemplifies this notion well. The startup’s owner, Junga Bahadur Shah, was a farmer based in Bara, with zero business experience, when his business idea first struck him. He had little capital to invest and those around him were reluctant to pour in funds at first, citing risk of failure. Determined to become an entrepreneur, Shah managed to pool together Rs 300,000 on his own to kick-start the business. He also sought technical counsel from fishery experts to set up the facility. Seeing that live-fish businesses had taken off in various places around Nepal, Shah surmised that a huge market for such an enterprise existed in Kathmandu, where the demand for fish often outpaces supply. “The success of my business is fueled partly by a growing consciousness among the public of the benefits of consuming fresh fish compared to frozen ones, which are typically laden with preservatives that are harmful for health.” The fish are loaded live into aerated water drums at fisheries in Bara and Chitwan and then transported to the capital in trucks. Since beginning his business at the Balkhu Vegetable Market, Shah has opened outlets in five other locations around the Valley.
Shah seems to have inspired many others to follow suit. Ramananda Mishra, Programme Director at The Fishery Development Programme, says that about 50 live-fish businesses have been established since the capital’s first outlet was started by Shah, three years ago, and that if the businesses could introduce the use of live-fish transport vehicles in Nepal, that would provide a boost to the industry and enable it to meet the ever-growing demand for live-fish among urban consumers.
Live-fish businesses in the Valley are also others down the supply chain. Many small-scale farmers in places like Bara and Chitwan are now turning to cultivating fisheries, prompted by the lucrative prospects in the trade.
Pack My Lunch is another exciting startup in the food and beverage industry. It was started by the duo of Deepika Shrestha and Samikshya Rai. It is the first of its kind in Nepal to supply lunch boxes to a host of customers in Kathmandu, including offices, schools and at events. “Our meals are sold at pocket-friendly prices, with orders beginning at just Rs 80. They are healthy and of home-cooked quality,” says Shrestha. Although the business is just a year old, it has been successful in securing daily orders ranging from 80 to a hundred boxes, which sell at an average price of Rs 130. In addition to lunch boxes, the company also runs cafeterias at offices. The venture was started at a cost of Rs 250,000, and according to Shrestha, the key operating costs include training staff and the cost of delivering lunch boxes to clients. The company has developed a niche market among urban customers who care about consuming nutritious meals at affordable prices.
SPICK AND SPAN
Bina Shrestha, Managing Director of Shine Cleaning, was inspired to start her own enterprise by her travels and stay abroad. The company is a year-old startup that has been providing specialised cleaning services in Kathmandu. “We not do daily cleaning; instead, we clean households or office items and spaces that are difficult to clean, including carpets, upholstery, parquet floors, and vehicles among others,” says Shrestha. While others in the trade are focused on providing manual cleaning services, Shrestha says that Shine Cleaning is the only company in Nepal that delivers deep-cleaning services with the use of state-of-the-art technology. The company has Swedish partner companies, Jannsen Cilag AB and Cleano Group AB, which train its staff on efficient cleaning practices that prioritise hygiene. Managed by Fair Entrepreneurship Network, the company also has a social motive.“It is frustrating to see thousands of people leave the country each day in search of employment opportunities, with their families and sometimes even their lives at stake,” says Shrestha. “I realised that specialised cleaning services, similar to the ones abroad, could be replicated in Nepal and doing so would be good business and allow me to make a difference by training unskilled workers.”. Her top clients include hotels, corporate offices, non-governmental organisations, embassies and households.
The mushrooming of startups in all kinds of industries is encouraging news for Nepal. Growth in a country’s commercial activity does not just bode well for its economic growth, but also means that jobs are being created, top talent is being retained at home and an efficient work force is in the making.