"Nepal has the potential to build international products"

Sluggish formulation and implementation of policies in the country have discouraged the tech startup industry from taking a leap forward. The lack of relevant institutions and experts has hindered research into the same. Similarly, the limited supply of supplementary skills and cultural gaps at educational institutions have created a widening skill gap among students.

For instance, if you pursue an IT degree, you may get technical skills such as coding but supplementary and critical skills such as communication and problem-solving, whether you work full-time, freelance, or found a company, are missing.

Barun Pandey, Ramesh Pathak, and Saramsha Dotel — founders of Naamche — stress the same and shed some new insight from a cultural lens in conversation with the_farsight’s Sabin Jung Pande and Rima Sah.

Pandey, Pathak, and Dotel — three ambitious same-batch computer engineering graduates from Pulchowk Campus — cater to the global market by building on founders’ ideas from scratch to research, marketing, and more.

Navigating through Kathmandu Metropolitan City’s Smart Urban Technology Challenge in 2018 and a 7-day boot camp at Massachusetts Institute of Technology, they came together to found Naamche, a product lab as they say, in 2020.

The conversation has been condensed for clarity.

You define Naamche as a product lab? What is a product lab? How does it work?

Naamche is a product lab, where we work with founders from the early stages of an idea, conduct research, and provide feedback to help refine and develop the idea into a successful product.

We follow the Lean Startup methodology - forming a hypothesis about the market and creating a minimum viable product (MVP) and then iterating focused on building Minimum Awesome Product (MAPs).

Unlike a typical IT company involved in simply coding, we focus on building a product, particularly in the field of AI and data. Our services are not that of an agency but an extension of their current team.

When and how did you conceptualise Naamche?

In 2020, we were working for a startup — NAAMII (Nepal Applied Mathematics and Informatics Institute for Research), which is an AI research institute based in Nepal. They were in the process of incubating another startup called Diyo.AI, where we (Ramesh and Saramsha) were actively engaged. Somewhere in between, we felt the urge to start building something of our own. So, we decided to venture out on our own and left the company in mutual understanding.

At the time, we didn’t care about market trends or outcomes. All we did was research different startup ideas from India. We came across an app called Inshorts, which summarises news into 60 words and thought about adapting this concept in Nepal. We then created a news aggregator app — Paana, similar to TikTok, where users can swipe to read the news with headlines and summaries.

While we were working on Paana, we made contact with a potential client in the US who wanted a solution for his real estate business using AI. Impressed with our work, he proposed to start a company with us if we could build an MVP in a month, which we did in just three weeks. Subsequently, he hired our team to fulfill his tech needs for reAlpha, a real-estate tech and investment company.

As the work piled up, we hired people from our own network, including friends and juniors. That’s when we realised that we needed branding and we changed our name to Naamche (previously Opsilon).

As a product lab, how do you assess feasibility and market perspective for clients coming from outside Nepal? And, how do you get clients?

Our work is mainly research-based and focuses on startup ecosystems around the world, including Silicon Valley and Austin. Our team is currently working on full-fledged market campaigning, including the use of websites and other methods.

Online media play a crucial role in our networking, accounting for 70-80% of it. Social media platforms like Slack, LinkedIn, and Twitter make it easier for us to connect. For startups with specific needs, we assist them by translating their domain-specific needs into technical requirements.

Additionally, for startups outside Nepal, we provide technical and marketing advice, but when it comes to business decisions the discretion is not ours as we are based in Nepal.

What were the challenges you faced with your first product Paana?

Paana was an AI-based news summariser that would swipe news from various sources, with manual editing from a content director. Our target audience was job holders who were literate and could understand English but didn’t have much time to read the news.

Back then, we faced a challenge between having an engineering mindset versus a company’s founder mindset. Our main focus was on improving our product. We were constantly asking ourselves questions such as how to make the app faster and better, who the end-users would be, how to distribute if there were no users, and what kind of content to add. 

On one hand, it was difficult for us to maintain the app with the content we had and ensure its financial sustainability. We soon realised that, for our users, the content was more important than the product itself. If the news was interesting and comprehensible, it made the reading experience more enjoyable. 

On the other hand, we used to feel that we had to do everything on our own, and there was no delegation. In hindsight, we realised that we probably weren’t ambitious enough. For example, earlier we were ready to accept an investment offer with a two lakh (two hundred thousand rupees) valuation, which actually doesn’t make any financial sense when we consider opportunity cost. But it was our first time as founders.

How is the working culture at Naamche?

We do not follow traditional approaches as some of the large IT companies based in Nepal do. Instead, we take inspiration from Indian startups like Trust Battery and Stripe. 

What Trust Battery helps us do is: frame how we see the trust between team members. Say we're not happy with someone’s performance, we don’t wait until their review. We just set aside a few minutes with them and tell them: “My trust battery with you is going down. You need to do these things to make sure it’s up”. It’s a metaphor that helps us communicate better (without bringing ego to the core).

Stripe has a simple Sunday Test for whether they’d hire an employee. The test? Simple. They ask one question. “If you knew this person (you're interviewing for hiring) is the only person in the office on a Sunday, would you be more likely to go to the office?”

They are not “revolutionary” per se. But these frameworks add up to building a cohesive team that cares about each other.

Our culture is developed by the founders and it is up to them to maintain and nurture it. We focus on the same tools used by startups in the US, like Notion and Slack.

Flexibility is important in our culture. We prioritise outputs over hours worked. It is okay to work three hours a day, as long as the work is completed. There are checks and balances to ensure this approach works.

Open communication is crucial, so employees must be available. We have strict warm-ups and encourage feedback from employees across their positional hierarchy. Our town hall meetings allow for open discussion of mistakes and improvements. We have five values that we strive to uphold.

You all graduated from Pulchowk Engineering Campus and are classmates. How did you bond and use your college time?

We joined engineering without any specific passion or dream. We started investing our time in software engineering and participated in startup competitions, and attended workshops and boot camps. As we attended these events, we developed an interest in building products and dreamt of building a multimillion-dollar company. 

In our third year, we won a startup competition on how to grow the city’s infrastructure, the ‘Smart Urban Technology Challenge’ (SUTC) organised by Kathmandu Metropolitan City, which was recognised by the then Prime Minister. We also competed in the Nepal Infrastructure Summit and then the Hult Prize competition in Dubai. It was a gradual learning of what it takes to build a company.

What was the project that won you SUTC?

The project was related to traffic management. We built a primitive AI system to identify vehicles on the road and classify them into categories such as cars, buses, and tempos. It was a last-minute application, where over 600 teams had applied, which also coincided with our exams. 

We were accepted and worked together to present the project as a business and won the Urban Infrastructure category, with our tech being able to identify vehicles and collect data to find traffic congestion. As the vehicles in Nepal were different from other countries, we had to create our own data set.

Where did you engage yourselves after completing engineering?

I (Ramesh) and Dotel (Saramsha) pursued careers in Nepal and gained local experience. While Barun always wanted to focus on entrepreneurship or study abroad. He went to Australia and started working on a startup. He attended a 7-day boot camp at MIT which was a pivotal moment. The boot camp really motivated him to think beyond the limitations of the Nepali market and aim to build a startup to cater to the global market.

We felt like we were underutilising our potential. We broke free from our jobs as Barun convinced us to join his startup, eventually leading us to build Naamche.

Did Pulchowk provide any financial skill training? Do you not think engineering colleges lack in providing such supplementary skills?

No, it did not provide such skills. Engineering colleges should focus on providing not only technical skills such as coding, but also supplementary skills such as finance, communication, teamwork, leadership, and problem-solving that are increasingly in demand by employers and crucial for founders too.

These skills can be developed through experience and can be fostered through opportunities available in college. Subsequently, the number of startups produced by Pulchowk so far isn’t impressive, a drawback that needs to be addressed. Compare that with unicorns in India many of whom are IIT graduates.

Another thing as a student and a founder is we underestimate the value of our time. For example, when we realised that we [and other students] usually aspire to build a company worth one or two crores, it’s a narrow-minded goal. The ambition should be building a 10-million-dollar company perhaps.

Unless people around you are doing crazy shit or pushing you to do crazy shit, it’s difficult to harbour that ambition. For that, we should be global market-oriented, and we [Nepalis] have that competence.

So the ambition should be to build something that can have a global user base. Nepal has the potential to build international products — instead focuses too much on building local products without thinking about time opportunity cost. This limits the potential for Nepali engineers to develop world-class products.

There are few who have done it. Programiz and Grespr are some of the products built by Nepalis professionals although one aspect that most of these builders have in common is they are educated abroad.

In your experience belonging to this tech generation and observation, what cultural issue exists at our educational institutions that affects students’ growth and development?

Skill gaps are also a result of cultural gaps. For instance, graduates can’t write emails to managers or clients because they are hardly exposed to email culture. Many engineering colleges lack that culture. So expecting those skills would be unfair. 

Another cultural gap among students is the lack of hustling culture or seeking out opportunities. One of our teachers pointed out to us that we have talents but we don’t reach out for opportunities, and we realised this when we attended a boot camp organised by NAAMII which had participation from Indian students as well. They reach out to universities and researchers seeking out opportunities, but we lack that culturally. We ourselves didn’t do that either. One factor in this gap is our education system which has failed to instill inspiration or ambition among students.

On the other hand, remote culture has opened up opportunities for exposure. There are students from Pulchowk Engineering Campus who are interning at global tech companies remotely who reached out to these companies themselves. So exposure is happening but it’s not an outcome of any government policy intervention but students’ own proactiveness. But of course, the exposure is not happening at scale.

One more thing is there’s no differentiation between +2 and university education. While +2 education can be more about routine classes, university education should be more about a place to explore yourself and find your true calling. However, this is limited by infrastructure gaps at educational institutions.

With the emerging startup scene in Nepal, are there any plans with Naamche to cater locally?

It may be possible in the future once we are established and then there’s that reckoning “Let's change the technological landscape of Nepal.” But at the moment, no. 

The Nepal government doesn’t have encouraging policies in place for tech companies that would attract investors. People are more interested in real estate-related investments or traditional business because there are decent returns.

Given the present tech startup ecosystem, it is difficult to secure funding and form a team. It can feel like you are investing 10 years of your life into building a Nepali company in a constricting environment. 

Another factor to consider is that the venture capital landscape in Nepal requires at least 6 to 7 years to raise a substantial amount of funding. Venture capitalists here tend to look for profitable companies, but it’s not necessary that tech companies would be profitable. For example, for sustainability, companies like eSewa and Khalti have service-based companies backing them up.

What are the opportunities and challenges for Nepali tech companies to develop products targeting the Indian market?

The Indian market is more accessible to us than the US market, both from a government policy perspective and a market perspective. However, there are scalability issues for products developed in Nepal. Technologically and skill-wise, we are behind compared to other markets.

If the goal is to create a B2C ecosystem like in India, there are already many startups competing in that space with better knowledge and accessibility than us. If the goal is B2B, then the US market is more viable. 

Even in India, many B2B startups are targeting the US market. For B2C startups, being based in Nepal makes it easier to study the business market, but more research is needed to cater to consumers. To develop a product for the Indian market, one might need to be based in Bangalore to study the consumer market.

What are the challenges to building an engineering team, locally, for startups?

At Naamche, we roll out internship programs to suit our engineering needs. The duration is flexible and we typically offer it for a duration of 3 to 4 months. 

Building an engineering team in Nepal can be challenging due to the current state of the ecosystem. If you look into India or the US, there is a great internship culture that allows working closely with the industry and provides exposure relating to product development which is lacking here. The lack of internship culture and the link between academia and industries create a mismatch between what industries require and what is available in the market.

Additionally, there is a high attrition rate, with many engineers leaving the country or going remote for better opportunities. To overcome this, companies have implemented training programs and a selective hiring process, mostly from within their own networks.

Soft skills are another area that needs improvement, as many engineers lack presentation skills and the ability to effectively communicate their work. Due to this gap, the actual effort gets underestimated. To address this, companies are promoting a culture of weekly open mic sessions to help build confidence and skills.

Another challenge is the limited number of senior engineers in the country, leaving a gap in mentorship and guidance for junior engineers. To build a strong engineering team, there is a need for more experienced engineers to guide the next generation. One way we can fill this gap is by setting up tech shops abroad and hiring foreign nationals. That’s what global companies mean.

On the flip side, the Nepali culture has a strong emphasis on studying and hard work. With the right opportunities and mentorship, engineers can progress rapidly, which has happened with our hires as well who have gone on to become better developers and independent managers.

What are your extension plans and approach toward it?

Our goal is to create software that can be used by a large number of users and make an impact. Currently, our focus is on developing business-oriented products that can improve the efficiency of businesses.

In the next 5 to 10 years, we hope to expand our focus and think about how we can improve the lives of people. Our primary objective at the moment is to help our developers work and market their products efficiently.

Instead of just focusing on growing our numbers, we want to focus on producing high-quality products. We want to make a significant impact with a small, talented team. We will still offer some services, but our main focus will be on developing innovative products.

Currently, our services business serves as a steady source of income for us. However, we are transitioning to prioritising product development. Our engineering team is doing a fantastic job.

We believe in the Netflix approach of a high talent density. We used to have 26 employees, but due to attrition, we are now down to 22. In the past, we tried to increase the size of our product team by hiring more people. However, this led to higher attrition rates and unsatisfactory work output. Instead of just replacing employees, we decided to involve our best 2-3 engineers in the product team. This resulted in better products, improved skills, and satisfied clients.

We have learned that continuously hiring more people is not always the solution. One excellent engineer can be more effective than five average engineers. The challenge is finding and attracting the best talent. It takes about 2-3 months to evaluate if an engineer is a good fit. 

To attract top engineers, we offer better hours, benefits, and flexibility. Financial stability is important to engineers, but they also want growth opportunities and interesting work that they find fulfilling. If the work is not engaging enough, no amount of money will make it feel worthwhile. In addition, we are considering opening a local venture capital firm in a few years.

The idea is to help local startups but with a focus on the global market. They need to create products for the global market. Additionally, the tech scene in India has boomed in just 2 to 3 years. Indian tech firms initially produced products only for the global market, such as B2B software. Now, they are developing products for their own market.

On another note, if you are connected within your network, you will learn about many opportunities. However, the startup network is limited in Nepal.

Lastly, what are the possibilities that Naamche can become a billion-dollar company?

There are several global products in our development pipeline that we believe can contribute to this goal. Our primary focus is on developers and AI-related products. In our three years of experience, we have learned how to collect funding, communicate effectively with investors, and build and pitch a product. This difference is what we believe will help us achieve our goal of becoming a billion-dollar company.

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Edit by Vivek Baranwal; Transcribed by Rima Sah and Dibyak Kapali