Startups in Bhutan struggle to mature into commercial business | #AsiaNewsNetwork


It has been more than three years since the first Startup Weekend was organised in the country, way back in 2016. Of the many winners, only a few are riding on the waves of success.

It did not occur to Dupjay Pelzang, a graduate of College of Science and Technology (CST) and a winner of the first National Startup Weekend, that operating his business idea would be difficult. He had cash prize of Nu 800,000. “I thought the main challenge facing the startups was access to finance. Because I had received the prize money, I didn’t expect major challenges along the way.”

Processing the licence was the first big challenge Dupjay Pelzang had to face. He went to the offices of Cottage and Small Industry (CSI), National Environment Commission (NEC), and Thimphu Thromde to process the licence for his product Sunjab—an electronic scarecrow to protect crops from wild animals, made using light-emitting diode (LED) lights in the shape of a tiger with motion sensors and high pitched sound.

“I finally got environment clearance from thromde only to deny not long after,” later they rejected it,” Dupjay Pelzang said.

NEC helped Dupjay Pelzang process the clearance after framing a new policy but he had to go back to thromde for location clearance. By then, he had wasted Nu 10,000 and 6 months. He had not even begun laying the foundation for Sunjab.

The founder of InnoHome (smart switch system), Pema Singye, won two startup runners up but had to drop his first idea—smart milk cream separator—due to financial constraints. He said that starting a manufacturing unit would have cost him about Nu 8 million. That’s not taking into account payment for land and employees.

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Pema Singye is currently working on InnoHome, a smart switch system on mobile to activate and deactivate electrical appliances at home. The idea won him Nu 600,000 at the Startup Weekend last year. There are myriad challenges still. To develop technical ideas into product, equipment and technologies have to be bought through international online shopping centres.

Pema Singye said that he did not own a credit card because the minimum bank balance required to avail of credit card was Nu 70,000; even if he used someone’s card, the amount was limited to USD1000 for a year.

“This process is delaying the project,” he said

Lack of proper payment gateway and platform to export the products even after the startups penetrate the market is the reason why most startups fail after few months of its initiation. Thus, Made in Bhutan brand cannot be exported abroad.

Founder of Miniature Bhutan, Sonam Tashi, said that the country should focus on exporting the products rather than emphasising on local market competition.

“I export my product (souvenirs) to nine countries. I use Facebook and Instagram to sell them. Many customers cancel their order because there is no payment gateway,” Sonam Tashi said.

The target customer for such CSI projects is tourist. Sonam Tashi said that while other organisations were exploring their products, Tourism Council of Bhutan neglected them. “Tourists visit only those places where guides are paid higher commission; we can’t pay them.”

Department of Information Technology and Telecom

So far, DITT has organised four technology-related Startup Weekends.

Information and communication officer with DITT, Deepika Rai, said that the National Startup Weekend was unique compared to other Startup Weekends in the country. The event was a risk-free experiential learning platform to help startups launch their business. The fund provided as prizes are monitored closely by the department and is released phase wise upon fulfilling the terms and conditions by the startups.

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The fund is ‘a seed support’ provided just to start the business and to build prototype, she said. “The fund will help them build the idea into a prototype with which they can move onto next stage for fund from relevant agencies.”

The co-founder of bundle.bt Nagendra Kafley said that Startup Weekend produced a lot of ideas and teams but only few landed in the market. It would be better to invest in small start-up companies, so that startups did not die after penetrating into the market, he added.

Department of Employment

The startup programme was first organised by Jamyang Kitsho (QED group) and Deputy Chief of Entrepreneurship Department, MoLHR, Ram Bahadur Gururg. It was aimed at strengthening the Bhutanese entrepreneurship ecosystem through strategic partnerships and collaboration.

According to Ram Bahadur Gurung, to implement the ideas, government should build ecosystem to nurture the ideas. Currently, the department is organising idea-stage events only. “Startup flagship programme will provide support from idea stage to launch of product in the market.”

The department is currently focusing on entrepreneurship education. Bhutan Education Blueprint includes the integration of entrepreneurship education.

Startup and CSI is one of the approved flagship programmes of the government. The Startup and CSI blueprint will be implemented from July. “Startup Bhutan office is one of the priorities of the flagship programme. This will be a ‘one stop shop’ that can provide a total solution for our budding entrepreneurs for startup Bhutan,” Ram Bahadur Gurung said.
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