Why garage ventures don’t flourish in Dhaka

In the suburban streets of Palo Alto, California, there stands a one-car garage, a converted shed that continues the ranch style of the main home but remains detached.

It is a trite structure with a padlocked green double door. An embossed plaque on the front reads: The birthplace of the 'Silicon Valley'.

It was in this humble 12x18-foot garage that college friends Bill Hewlett and Dave Packard first pursued the dream of a company of their own.

Guided by an unwavering desire to develop innovative and useful products, the two men went on to blaze a trail at the forefront of the electronics revolution and formed the famous company HP.

This start-up garage has become more than just a part of Silicon Valley's folklore; it has transformed into an image, an exportable idea that reveals a set of strategies and theorems that continue to operate in the modern technology-driven world.

The garage has become the architectural symbol that would attract the right investment.

Once the garage is dematerialised and mobilised by the characters, corporations, and technologies that emerged from the space, it becomes a doctrine stretching its existence beyond the private and intimate format of the house and goes on to reabsorb the public.

Information Technology (IT) companies, especially the start-ups in Bangladesh also have this idealised picture of Silicon Valley where a company can be started from nothing by anyone in a garage.

This idealised picture is sketched based on the ideas that tech giants like HP, Amazon, Apple, Google, Mattel, Microsoft and Dell, among many others, were started by previously unknown genius founders from incredibly humble beginnings and became multi-national, billion-dollar corporations.

I would like to argue that the idea of starting these businesses from zero is largely misrepresented. The garage by itself is significantly more than what meets the eye.

I am saying this basing on facts.

I had visited some of the houses in the southern half of San Francisco Peninsula and I can tell you that the garage of even the simplest of those houses has better amenities than some of the highly priced office buildings in Dhaka.

Why garage is so good?

First of all, to a Bangladeshi, any neighbourhood of the Santa Clara Valley of California (Where Silicon Valley is located) would appear as a dreamlike place with spacious roads and houses nestled amidst the picturesque hills.

Then when you learn about the rent of one of those houses (starting from $2600 per month), the very existence of a garage would make you think that there is enough wealth available to support a fairly large non-essential space to experiment with ideas.

That garage has all the amenities which come with the house-air condition, proper ventilation, water supplies, continuous electricity and obviously very high-speed internet – things which not even many of the offices in Dhaka's posh neighbourhoods get even after paying hefty amounts.

Besides, the typical garage we are talking about is larger than what most families in Bangladesh live in as their primary space.

Also, one should not forget that the value of the garage also comes from the safe neighbourhood which allows business founders to work on their project without the danger of their inventions and small profits being taken away by criminals or competitors.

A neighbourhood where private property and inventions are respected is a huge invisible value and unfortunately is not present in most parts of Dhaka.

The other necessary factors

Aside from the obvious amenities that come with a Silicon Valley garage, there are other factors too.

There is no doubt that when you are building a 'garage start-up' you must have enough savings to support not only your business expenses no matter how small they are, but also your own living expenses between the time you start working full-time at your business and the time the operation starts making enough revenue to provide you with profits you can live off. This typically takes at least one to three years.

In Silicon Valley, it is possible for a young entrepreneur to come up with that savings before going for a garage venture because there are scopes for several part-time works.

Jobs like working in a fast-food shop or car washing facility pay one of the highest amounts in the world in Silicon Valley.

When one takes all these into account, the idea of starting a business in a garage becomes less readily available than one would first think.

It is basically open for people who can afford a house in a fairly rich neighbourhood, have good education, work experience, and have freely available funds.

Such conditions exist for a significant number of people in a developed country like the USA but it is almost non-existent in nations like Bangladesh.

In an ever wider scope, the garage business can only survive if the laws of the country support such initiatives in general.

If you are not allowed to tinker and sell your products without going through complicated bureaucratic systems to set-up expensive companies and pay all kinds of taxes, you can say good-bye to any start-up. Start-up experimentation requires freedom of business.

The case in Bangladesh

There is no doubt that the tech start-up culture has carved its niche in Bangladesh. Having worked in the IT sector for two years and later covering news on it for the next 10, I can say that the younger generation has been swept away by the dream of being an IT entrepreneur rather than just a salaried programmer.

The problem is that the ventures by most of the young IT entrepreneurs are confined within getting small or mid-level projects in the online marketplaces.

Most of the entrepreneurs work individually from their home as those projects can be developed by a good lone programmer.

There is no doubt that developing those projects obviously increases the programming skills of the individuals and earns them enough money to support themselves.

However, the dream of bringing out breakthrough ventures like those ones of Silicon Valley remain a distant dream.

In this era of massive computational capacity, it is nearly impossible to develop an enterprise level IT product by an individual. It has to be developed by a team and for that either "office space" or "garage" is needed.

There lies the problem. It is not feasible for an IT entrepreneur to rent an office in commercial district of Dhaka because the rent is out of his/her capacity.

Even for a small IT company, renting place in the commercial district is not feasible. That is why more than half of the IT offices in Dhaka are located in residential houses.

The government moves and drives of removing commercial establishments from the residential quarters of the capital put the IT entrepreneurs in serious peril because now it has become even harder for them to come up with a breakthrough venture through establishing an office.

That is not all. Before the budget of 2016-17 fiscal, the IT establishments used to pay a nine percent VAT on house rent. Now it has been made 15 per cent. The leaders in the IT sector have repeatedly requested the government to lessen the VAT but the government does not pay heed to their appeal.

No wonder that the talented IT entrepreneurs of Bangladesh have yet to come up with any breakthrough product because half of the success depends on the right environment where the talents can bloom.