And what is even more unexpected, private players, as well as the government, are investing in these entrepreneurs and striving to develop a sustainable startup and investor ecosystem.

We are sitting in a taxi, slowly moving through a typical traffic jam with rickshaws squeezing in between cars on a road full of potholes. While we are on our way to a meeting at the biggest telecom provider in Bangladesh, Grameenphone (GP), a swarm of around 100 colorfully dressed women passes by. Our Seedstars ambassador Tanvir Sourov informs me that they are on their way to work in an RMG factory around the corner. Bangladesh is the 2nd largest RMG exporter in the world and the industry accounts for 80% of the country’s exports. The main reason behind this staggering number is the competitiveness the country owes to its low labor costs that actually stem from the lowest minimum wage level in Asia.

Source: International Labor Organization

Mostly thanks to the RMG sector, Bangladesh has achieved growth rates of at least 6% p.a. for the last 10 years. The government’s Vision 2021 has set out to grow the economy 10% annually and become a middle-income nation by 2021. These achievements, as well as the ambitious growth goal, led the World Economic Forum to compare the nation to Hong Kong or Singapore, which have experienced similar growth trajectories in the 1960s. The WEF even poses the question of whether Bangladesh might be the next Asian tiger. However, in order to unleash its feline forces in their full extent, the nation has to sharpen its claws and diversify its economy towards higher value creation products and services.

Source: Asian Development Bank

“The government has just launched the initiative Startup Bangladesh aiming to build 200 businesses in the next few years, including a fund of USD 34 Million”, says the advisor to the ICT minister Tina Jabeen. Yet, the startup ecosystem in Bangladesh is still nascent. It has first gained some international attention when Samad Miraly and his team at SD Asia released the documentary Startup Dhaka. His team is also supports one of the country’s most prominent startup accelerators Grameenphone Accelerator, which is according to Jabeen the absolute benchmark in terms of the quality of founders, who graduate from it. GP’s Head of Transformation, Kazi Hassan, says that the company started its activities in the startup field because they wanted to bring an entrepreneurial culture into their own organization. Moreover, they felt responsible to contribute to society as GP sees itself as a tech company that helps society - connecting people to 4G is one way, supporting entrepreneurs another.

Individuals and institutions are putting a lot of effort into creating Bangladeshi success stories such as the startups sheba.xyz, field.buzz, or Maya Apa, which slowly make entrepreneurship more and more a viable career choice. Still, Hassan tells me that they have had to invite parents of applicants to their accelerator in order to convince them that joining the batch is a valuable way for their child to spend their time instead of joining an already established company.

The biggest challenges for entrepreneurs include access to capital. The local ecosystem is very informal and hence the right connections are vital. International investors avoid entering the Bangladeshi market as - in case of a successful exit - it is practically impossible to extract money out of the country again. Moreover, classic infrastructure, like roads, is still quite poor. Moving around its capital is generally a challenge as the average traffic speed in Dhaka is 7 km/h. Also, road safety is a big issue, which triggered the recent mass protests. I was myself in 3 accidents during the 10 days I spent in Dhaka. Both of these factors - poor infrastructure and hostile context for international investors - influence Bangladesh’s rank in Ease of Doing Business report of 177 (out of 190 countries evaluated). Furthermore, the founders complain that it is hard to find qualified employees with the right mindset. On the one hand, this pertains hard skills, on the other hand, employers miss a can-do attitude.

Typical for an early-stage ecosystem, many entrepreneurs copy what has worked somewhere else and adapt it to the local environment. While it is important to keep in mind that developing copycat solutions helps to hone entrepreneurial skills and develop the ecosystem, the country is in dire need for solutions to local problems. Muhaimin Khan, COO of Better Stories, feels strongly about the blindness of some entrepreneurs towards local issues they have grown immune to such as bureaucracy or safety. He, however, thinks if the youth takes a stronger stand to develop systematic solutions it can boost the startup ecosystem.

Nonetheless, when I was there I was blown away by the drive and enthusiasm of many entrepreneurs I met. While evaluating the almost 200 applications we received for Seedstars Dhaka 2017 we had an exceptionally hard time to bring it down to the finalists since we received many high-quality applications. Working with the finalists was an outstanding experience because they were all utterly motivated to improve their country like Mamun, the founder of CMED, who wants to fix his country’s broken healthcare system. Also, their pitches were among the best we heard on our entire tour. Although the ecosystem is still young and entrepreneurs are facing a lot of challenges, every single person I had the opportunity to interact with was inspired to work on them.

Seedstars Dhaka 2017. Source: Seedstars

The recently launched government program Startup Bangladesh and the Grameenphone Accelerator are some of the examples that highlight the enthusiasm of the country for innovation and technology instead of textile and manufacturing. There are a handful of prominent actors - like the ones, who were kind enough to talk to me - among investors, corporates, the government and entrepreneurs that are on the forefront of this movement. However, Bangladeshis are battling with countless challenges still holding them back and need to tackle these before Bangladesh can claim its title as the next Asian tiger. Will the country manage to handle this massive to do list - what’s your bet?