It is perhaps no surprise that the person whose company was one of the first movers in the food delivery industry in Bangladesh is passionate about food and innovation. As result AD Ahmad co-founded HungryNaki along with Sazid Rahman and Tausif Ahmad. Five years later, HungryNaki is an established company in the food delivery market, Ahmad’s team grew from seven people in 2013 to 225 in 2018, and the operation extended in many areas beyond Dhaka.
An American International University graduate, Ahmad studied Electrical and Electronic Engineering with major in VHDL and industrial robotics. Fintech spoke with Ahmad at his Mohakhali DOHS office to learn more.
FINTECH: Tell us a little bit about how HungryNaki came about and your own background.
Ahmad AD: I studied electrical engineering at AIUB. My thesis was on industrial robotics. But I was always interested in programming and technology in general. I was very interested from an early age work on something like what I did in my thesis. I finished university in 2007 and joined a textile company the next year. I worked there for eight years, which is until 2015.
We founded HungryNaki in July 2013, while I was still there. I had started thinking about it before that, in 2012, when I started to lay out plans for how to do it. We are planning to start a tech venture at that time. We saw the rise of internet users thus enabling thousands of opportunities.
Interestingly, when I was working in textile I thought about working with fashion retail. At that point I never thought about working in food. But it just happened. We used to sit for meetings and we always needed food in these meetings. It was like the meeting can’t happen without food. That’s when the idea popped up. We used to order food through someone, who would take the details from us and then go buy the food for us. We thought about a service that will expedite the process. At the same time, these problems were being addressed in foreign country, so why not us too? That’s how it started.
But the ‘innovation’ part wasn’t the problem here. Implementation was the issue. What we realised was that if we go forward with the platform model then we weren’t going to get the delivery support from the restaurants. They just didn’t have that resource. Nor would they be interested to build that structure. So, we decided to work with the platform model in a way where it will work. We went ahead to make it happen in June 2013, and in July 11 we had our first official working day. We had four team members and the other three were the founders. That was the start of HungryNaki.
FINTECH: You started about the same time as Deliveroo. Did you study established food delivery models elsewhere in the world before setting up HungryNaki?
Not at all. We were aware of such services and platforms. We simply started with a ‘learning by doing’ approach. I and one of the other founders were in the textile industry. So, we had experience of administrative work. We used that experience to our advantage.
FINTECH: You got the advantage of being an early mover. But is it waning with more competitors entering the market?
When we entered the market there was another website called ‘Khana Hero’. That was the only competitor. Then Foodpanda started in December. So, we got two competitors within three months of our launch. Besides, Competition makes us better everyday. We believe more competitors in the area will create a bigger market size and consumers will get more freedom to choice their preferable type of services.
FINTECH: What was the market like when you started and did you think this will gain traction?
Actually, we were quite confident about our business. We were kind of the dominant force in the market. When Foodpanda started it had only the platform, didn’t have delivery. They had to go through a tough stage. They then partnered with a third party for delivery. Khana Hero partnered with a group called ‘BD Cyclist’. They collaborated with that group for delivery. We, on the other hand, did everything on our own.
We started out with two delivery man. That was in October, when we launched our operation. That was our strength. And that is why 2014 was a great year for us. By then KhanaHero had closed down. Only we and Foodpanda were in the market. For the most part we were ahead in market share.
FINTECH: Although this business model is uniform in its basics, but where you differ from your competition?
We are uncompromising about quality. We don’t allow inferior product. We really believe that excellence is what drives the business. We have to be committed to what we promise our customers. Our first ever delivery was late, and from that very first delivery on the first day we showed our resolute commitment. We apologized to the customer and did not charge. The meal was given free of cost. We even sent a letter to the customer. This is because we don’t want to give excuses. What was the situation of traffic, whether we had delivery man available – these are our responsibility, and we have to take that responsibility. This established a trust toward from our customers.
FINTECH: It is difficult to acquire funding without a proper VC ecosystem. Tell us a little bit about how you got your funding.
We are very much a bootstrap company. we funded ourselves. We are one of the first, I believe, who did this. We did it without an investment company. Our vision was to do it without outside investment. Not that anything wrong with that, but we wanted to do it our way. Another important thing is, we did all the mistakes with our money so that once we will take the outside investment it will enable to invest on proven results.
We fortunately had the resources to fund ourselves. We saved from our income and invested that in our business. We generated further fund from the business. Our business has been very organic in the way it grew. We say that our customers are our promoters. I think if you take feedback from people that’s what people will acknowledge. The customers did our branding for us. We are now in discussion of raising series A investment. We locked major part of the funding and will be closing the round by May.
FINTECH: What sorts of challenges you faced in getting the technological side of your business up and running?
For technology, the most important thing is to finding good resources. The entirety of our technology has been developed in-house. We never used anything from others, with just one exception where we took part of a mobile app. And then some parts of the work were outsourced. But other than that we developed everything else.
The main challenge, as I said, was to find good resources. The technology we are currently using,is not being used by many others. We are looking for human resources for expanding the scope of our work.
We give more importance to mindset than skill. There are people who have skills, but lack the right mindset. We look into what people are prepared to do, what challenges they are willing to take on. This is a challenge for us too, to find the right human resource.
FINTECH: Are you thinking about new solutions in the food delivery market? What is the next step in the evolution of food
Yes, of course. We are covering the restaurant areas. We want to broaden our spectrum. We are laying out our plans according to food demand. Aside from website and social media we are working on reaching customers in other more direct ways. Sky is the limit I think in this industry.
An interesting thing is that we have food on occasions of happiness, like a child birth, and on occasion of grief, like in rituals related to deaths. The reality is food is literally part of our lives, you can’t do without it. Food is also a source of entertainment. We simply want to provide all solutions needed in this area.
FINTECH: Are you using customer data for analyzing trends, and to create custom offers etc?
Yes, but we are very careful about customer information privacy. We maintain these data with due diligence. We work with food trend and demography. We are always looking into where we can create a great offer. We also constantly collaborate with the restaurants to create better relations with the customers. And we don’t do this manually. Some of these are done manually, but most are done digitally. This is very important for us. This goes back to our main vision of not compromising our quality. So, we collect the data and maintain them responsibly.
FINTECH: There has been a surge in interest worldwide in food delivery. How important is technology in the whole food delivery industry?
I remember first seeing the Alibaba website in 1998. I was very familiar with the Internet from a very early age, since when Proshikawas operating. Alibaba recently bought Ele.me, which is a food delivery service in China. It’s actually the second biggest.
The more technology advances, the more AI will be important. Food delivery is very much within the purview of this. If one day you find a robot coming to your house for cooking you a meal, don’t be surprised. You must have heard that a restaurant in Mohammadpur recently started robot waiters/servers. I am very hopeful about where the whole technology, AI and automation is going .
FINTECH : Although reliable data is a problem in Bangladesh, do you still have any figure indicating your market share? If not, what is your estimation based on observation?
You are right. This is certainly a big challenge for us. It’s actually true, we don’t have sufficient data to accurately know our market share. We don’t have the necessary mechanism in Bangladesh to gather that data. You can’t even find a basic data like how much customers are spending at the restaurants. And whatever you do have is not reliable.
What could be done here, is to get estimation through sampling. In case of third party there is a danger of bias. We have a plan to work on building a proper structure. You have to employ real economics principles and parametres for this.
FINTECH: Are you thinking about expanding into other businesses?
No. We are fully focusing on HungryNaki. But I happen to have a passion for electric vehicle, and hope to work on that. We are doing an experiment right now. Other than that I’m not involved with anything else.
FINTECH: Last question, where you want to see HungryNaki in five years?
That’s a big question. I don’t recall where I had wanted to see us five years ago. We want to continue providing a quality and transparent customer service. We have only provided a small solution in food. The spectrum is far wider in the food related field. You have food safety, food wastage, supply and so on.
So, I think we want to widen our scope in the next five years. Take food safety, for example. When you go someplace to eat, do you know how healthy the food is? Or do you know the hygiene level that was maintained? We want to cover these areas. We have 18 crore people who have all kinds of needs relating to food. We want to be part of the solution for this population in the food sector. ■