Forget the infographic gloss and the venture capital bling. As someone who's seen the Bangladesh startup scene up close, I'm tired of the same old song and dance. We need to have an honest discussion, a hard-core gut-check. We're not failing because we lack "potential." We're failing because of these seven brutal realities, and until we address them head-on, we're just rearranging deck chairs on the Titanic.

No One Here Believes In Us

The stats don't lie. A 95% drop in local investment? That’s not a dip, that’s a cliff dive. It’s a howl of despair, it shrieks of absence of confidence from inside. Why should foreign investors take a risk when our own won’t recognize the value? Is it a lack of understanding? A fear of risk? Or something invidious – a cultural bias against innovation?

I’ve heard from founders who did the initial pitch tour with local funders. Instead, they were met with skepticism and onerous demands for near-term, guaranteed returns. They’re not taking bets on ideas, they’re not investing, they want to find that quick buck, that guaranteed win. That’s not how innovation works. That’s like hoping a watermelon seed will bloom within a day. Creating it takes encouragement, determination and indeed a readiness to embrace failure as an inevitable step forward.

This local apathy is a self-fulfilling prophecy. No local money, no validation. No validation, no foreign investment. The cycle continues. And it's killing our startups.

Red Tape From Hell

Think navigating Bangladesh's regulatory landscape is tough? Now, try doing all this, while at the same time launching a company, raising venture capital and tussling with the future competitors for market share. It’s a little like trying to run a marathon in ankle weights and a blindfold.

Or registering a business and getting the necessary permits — which can be exceedingly complex. Even for the most optimistic entrepreneur, stark regulations can be disheartening. One founder recounted spending six months—it took half a year—getting a basic trade license in the first place. Six months! That’s half a year of potential revenue down the drain, time spent trying to get something to happen, and frustration building.

It's not just the complexity. It's the arbitrariness. First, regulations are frequently poorly drafted, open to interpretation, and unevenly enforced. This circumstance breeds corruption and favoritism. Success is determined not by what you come up with, but by the relationships you build and your money’s clout.

This is not merely a nuisance. It’s an innovation tax. It’s a transparent anti-competitive barrier that shields incumbent players from competition and innovation.

Our Education System is a Joke

We may be producing college graduates by the score, but how many are really prepared to join the workforce? How many possess the critical thinking skills, problem-solving abilities, and hands-on experience needed to thrive in a fast-paced startup environment?

The answer, brutally, is not enough. And it’s not a small number — a staggering 73% of startups are having trouble finding the tech talent they need. That’s not a talent shortage, it’s a skills mismatch. Our educational institutions are still 20th century at best. They spread outdated curricula and fail to prepare students with the foundational skills needed to succeed in today’s world and the 21st century.

That’s akin to trying to teach someone just how to ride a horse, when cars have become the new mode of transportation. It’s a nice skill to have, sure, but it’s not like the hottest thing out there. We must completely transform our education ecosystem, put real emphasis on skills training, and encourage a culture of continuous education. If not, we’re simply priming our graduates for failure.

I make a connection here. It’s akin to asking a farmer to plant crops and refusing to give him any seeds or fertilizer. You can’t hope for the growth of a startup economy without a pipeline of technical talent.

Infrastructure That's Stuck in Time

Consider the challenge of building a state-of-the-art e-commerce platform in a country with intermittent broadband connectivity. On that issue, logistics are a logistical nightmare, along with rolling blackouts every day. That's the reality for many Bangladeshi startups.

Inadequate infrastructure is a silent killer. Beyond that, it raises operational costs, shrinks the market you can reach, and chips away at customer satisfaction. It’s the equivalent of attempting to construct a high-rise on a quicksand base.

For e-commerce businesses, the logistical painpoints are even more severe. With outsized shipping costs, slow deliveries, and lack of access to less populated areas, new entrants can’t compete against the incumbents. For all startups outside of ICT, a lack of consistent and affordable internet service and recurring electricity blackouts hamper productivity and innovation.

  • Poor logistics
  • Unreliable internet
  • Frequent power outages

In a country where intellectual property rights are weakly enforced, innovation becomes a high-risk endeavor. Why invest time and resources into developing a groundbreaking product or service when someone can simply copy it and undercut you?

IP Protection? What's That?

Weak protection of Intellectual Property (IP) is a significant disincentive to innovate. It chokes innovation, it sows uncertainty of lurking investment, and it pushes talent out the door. It’s akin to constructing a home without a ceiling.

Startups need to make sure that their concepts are cached in a safe haven. They should not be exploited by their less scrupulous competitors and they deserve to see their hard work rewarded. Until we strengthen our IP laws and enforce them effectively, we're sending a clear message: innovation is not valued here.

Now, good luck getting that loan as a startup founder from a traditional bank in Bangladesh. You'll be met with a wall of requirements: collateral, credit history, proven profitability. Things most startups don't have.

Banks Don't Speak Startup

Traditional banking practices are fundamentally incompatible with the realities of startups. Banks, on the other hand, are risk-averse institutions—and for good reason—while at the same time, startups are inherently risky ventures. It’s the impossible task of trying to fit a square peg into a round hole.

The central bank has been badly misguided in encouraging India’s commercial banks to partner with VC firms as a stopgap arrangement. That’s just a Band-Aid solution. We’re going to need a much more serious change in attitude, a realization that startups are something other than just another form of business. They are the engines of future growth.

This is perhaps the most savage reality of them all. We celebrate mediocrity. We reward conformity. We punish risk-takers.

We Celebrate Mediocrity

In a culture that teaches respect for stability and tradition, entrepreneurship is viewed as a wishy-washy risk-taking bet. Parents routinely dissuade their children from departing down an entrepreneurial path. They tend towards the safety and stability of careers in government or large, multinational corporations.

When startups succeed, too often they’re greeted with disbelief and jealousy rather than celebration and cooperation. It’s the equivalent of being a tall poppy in a short poppy field.

We need to change this mindset. We should be promoting invention, encouraging risk-taking, and creating a community of entrepreneurship starting in elementary school. Otherwise, we are going to be doomed to repeat the same mistakes.

Until we acknowledge these seven hard truths, the Bangladesh startup ecosystem will continue to be a mere facade of what it could be. Consider this your wake-up call. To realize these goals, we need a complete change in our thinking and a shared determination to develop an innovation-friendly ecosystem. The future of Bangladesh depends on it.

Until we confront these seven brutal truths, the Bangladesh startup scene will remain a shadow of its potential. It's time for a reality check, a fundamental shift in mindset, and a collective commitment to creating an ecosystem where innovation can thrive. The future of Bangladesh depends on it.