INTERVIEW: Chat with iHub Bhutan — How are entrepreneurs innovating in the face of COVID?
Updated: Aug 21, 2020
Guest post by Bishnu Chettri, UNDP Bhutan
iHub Bhutan is a platform that aims to build a strong ecosystem for nurturing innovation and startups in Bhutan, empowering the next generation of budding entrepreneurs. Since 2017, Tashi Wangdi has catered to over a dozen startups, half of which are now self-sustaining entities.
At iHub Bhutan, success is intertwined with personal fulfillment and community satisfaction. Their services include: pre-incubation programs, co-working spaces, research and consultancies. Above all, they strive to incorporate the individual “ME” into the greater “WE.”
Currently iHub Bhutan is a participant of the Springboard Programme of Youth Co:Lab, a project co-led by the United Nations Development Programme (UNDP) and the Citi Foundation.
1. When did it first become clear to you that the COVID-19 pandemic was starting to affect your business and surroundings?
The moment the government announced that we had to adhere to physical distancing rules, I realized that things would not be the same going forward. After that I had a couple of discussions with our startups to ensure that everyone was following the government instructions at the workspace, such as using hand sanitizer, maintaining two meters distance and using masks when in a crowd.
As far as personal impact goes, I had to cancel a few interns who were supposed to join my team. That was a difficult decision, as I have been taking interns for a while now. But to reduce crowding, I could not do it this time. There was also an issue of reduced cashflow: I was not receiving any new applications for co-working spaces, so things were tight.
And of course, the general impact was immense, from the increasing number of COVID cases to the decreasing number of cars on highways, from the bustling clocktower emptying out to the drastic drop in price of handwoven Gho and Kira online. Many of my own tour guide friends also began losing their jobs. I think this global crisis made us realize that as entrepreneurs, we depend so much on neighboring countries for raw materials. Once lockdown was imposed in bordering areas our startups started to struggle. All of these were early signals that there was no more normal.
And frankly speaking, before COVID iHub was just surviving. So, at the moment we are mostly trying to focus on and replicate programs that were going well before.
2. What was iHub’s immediate response to COVID-19? Tell me a little bit about how you have made sure that iHub and startups using your co-working space have been able to adapt to this unprecedented pandemic.
During the second month of the government’s social distancing regulations — when shops started to close by 7 pm, commuters had to reconfigure seating arrangements in public transportation, and social gatherings were strictly prohibited —one of the teams here, “Team Happy”, completely went out of business.
That is when I really understood what iHub’s future could be like. From day one I have believed that iHub’s success or failure grounded in the success or failure of the startups using our co-working space. It was hard for me to fully grasp it all.
I immediately got in touch with friends and mentors from near and far, trying to understand how they were dealing with the pandemic. One thing that really caught my attention was the suggestion to take a step back and reflect on iHub’s vision, and to formulate objectives and key results for our new reality.
Within the team, we listed all the potential things that we could do to respond to the pandemic. Food delivery was one idea that I have been mulling over with friends for a few years now. And then one of my childhood friends, who was in Japan with the Ministry of Labour and Human Resources’ Learn and Earn program, had to return home due to COVID. It was a blessing in disguise as he was able to bring to the team the very financial expertise that we initially lacked. We were able to seize this opportunity to start an online food delivery service for restaurants where customers could not walk in for pick-up.
When we started, we targeted people in quarantine facilities, but interestingly we started to get more orders from people outside these facilities — mostly from families and young couples. After that we started to change our advertising strategy to cater to a larger audience.
We are also engaging with startups that are momently stuck due to COVID as share partners in this new venture. This new venture has also helped me to better understand digital infrastructures and diversify my revenue model.
3. It sounds like in the lead up to the pandemic you had prepared for diversifying your revenue model by digitalizing infrastructures. If you could just give me a sense as an aspiring entrepreneur — why should I make use of this service?
Yeah, you are right! You know, as startups many of us do not have proper office addresses, yet when obtaining business licenses, we are supposed to produce “occupancy letters”. Therefore, having iHub as one’s virtual office makes it a lot easier to fast-track the licensing process.
There are bottle necks in the licensing process in general. That is a completely different story. However, we in the private sector should do what we can. Unlike us, new startups do not have to take the difficult path. It took me a week or so to get an occupancy letter and almost four months to get a co-working space license. This was after several attempts to get officials to understand what a co-working space was, as supposed to a training center.
Most startups probably encounter the “valley of death” early on due to institutional procedures and lack of market research. I suppose overshadowing your decision with emotion rather than facts and figures certainly does little good in business.
4. Correct me if I am understanding it wrong. The path to success for some of the startups at your co-working space, including yourself, was to collaborate and co-create. How do you manage to get these startups and people of differing viewpoints to come together?
I think it has to do with the trust we build among ourselves. No matter what differences we have as a startup in terms of idea and business model, if we have clarity on why we are doing what we are doing, I believe things will go fine. Touch wood!
Our collaboration does not stop here either. Everyone is in full swing as I speak, and we are in negotiations to get an app developer on board who will be instrumental in upscaling our current platform and make it more user friendly.
We hope that we can update new features as the business grows so that we avoid the security issues that we commonly hear about with domestic apps.
Moreover, likeminded people always get along!
5. Are there any lessons around this kind of collaboration that you are taking away from this?
A situation like this certainly brings people together for all the right reasons.
Personally, I have two key takeaways. First, pertaining to the idea of collaboration: it is imperative to collaborate rather than compete. In normal situations we see different startups focused on their own businesses. However, in times like these, we are forced to realize our own weaknesses. I feel we should know (a) who we are, (b) what resources we have and (c) who in our network is able to add value so that we can create win-win platforms.
I suppose our entrepreneurs have realized by now that with lockdown in neighboring countries, most of us became unable to operate as we ran out of raw materials. Thanks to the government, we have managed to get several truckloads of raw material for the entrepreneurs. But how long can we depend on them? Can we think of creating local supply chains for the material that we need for production?
Secondly, relating to our food delivery venture: it is becoming clear that people living in urban centers, like Thimphu are changing their eating habits. Pizza is our top order. Looking at that trend, we might see it becoming part of a millennial’s diet in Bhutan. Another trend that may come to surface and that has protentional is the concept of black kitchen/Cloud kitchen. But before we end up with the same issues as homestays and private apartments registering for Airbnb — are our authorities ready for such change or would they impose restrictions that would have a negative impact on business? Whether the private sector and the government can stay on the same page is questionable. And that could lead to missed opportunities.
6. What are some of the biggest misconceptions about co-working that people have?
People think that coworking is just about a bunch of startups that cannot afford their own office sharing some space. In reality, it is so much more. The effort that goes into creating the feeling of community is monumental, and slowly people are starting to realize that co-working is beneficial and here to stay.
That is probably why globally so many large corporations — including Microsoft, and Barclays Bank — are moving their employees into co-working spaces. Soon enough the word co-working will disappear, and all offices will be functioning in co-working settings. But it will take time for things to happen that way.
7. What online or offline resource should Bhutanese entrepreneurs check out right now to learn how to adapt to the COVID-19 situation?
For my own learning, I use LinkedIn. I follow people who are running co-working spaces. Connect with them and seek advice. Entrepreneurs.com and youthcolab.org are two of the websites I frequently visit.
Most of the things we want to learn are already there on the internet. I think we need to know how to use keywords while surfing the internet.
There are also several interesting free online events and courses related to entrepreneurs. This is the right time to invest in this type learning and gain new insights into your own business. At the end of the day, what matters is how you use this knowledge when running your startup.
8. Do you see this pandemic as an opportunity to rethink some of the things that are not working in terms of creating entrepreneurship-enabling ecosystems?
Yes, I feel that COVID provided us with an amazing opportunity to hit refresh. There are three components that we can really rethink when it comes to creating entrepreneurship-enabling ecosystems:
(a) Creating pools of mentors:
Due to tremendous competition, nothing can be achieved without acquiring proper skills. In times of massive disruption, like now, mentors can play a catalytic role in the survival and success of a startup. Yet rarely do we have mentoring as part of a company’s culture. In motivating entrepreneurs through success stories and moral support, mentors can play pivotal roles in encouraging people to persevere. Currently Youth Co:Lab’s Springboard is helping me a lot.
(b) Access to funding:
Interest on loans provided by financial institutes are very high. Youths who do not come from privileged backgrounds are hesitant to put their families through the nightmare of impending mortgage payments. There is a great need for more angel investor platforms and for more private equity funds
One very good initiative that I have seen during COVID is Loan-Grant Funding by the Loden Foundation and UNDP. Such funding is critical for startups since we are not eligible for many grants. That is a bigger question though. I do not really understand why that is.
(c) Industrial relationship networks:
Networks of individuals and firms not only provide opportunities for new ventures, they also help them in managing the hurdles that they face. Networks are thus essential. They should involve: information networks, which allow one to identify opportunities, exchange networks, which allow one to acquire resources, and networks of influence, which allow one to build up a business’s reputation.
Networking at different levels and in different spheres influences the creation and growth of the firm by keeping track of opportunities and utilization of resources. It is an essential tool at the initiation level of entrepreneurship and a great help to the running of a business. Should startups want to see established business as partners, it is imperative to have industrial relationship networks.
However, things have been improving over the years, and I believe it will continue to do so moving forward.