Technology companies need money – sometimes lots of it – to get off the ground. Even though they hold no inventory and staff few people, their business models are capital inefficient for the first few years. Unlike the local coffee shop, which only needs neighborhood patrons to make money, web-based businesses sometimes only make money after they scale to serve hundreds of thousands of customers.

So it’s no surprise that the investor and innovation communities evolve in lockstep. They are tied to one another. In less mature tech hubs in Asia and small cities in the US, access to capital is often a limiting factor. The reason we’re not seeing many explosive tech companies from places like Bangladesh – where there are many talented developers – is because there are so few investors. There are few investors because the tech industry is young, but also because there are few acquisitions and IPOs among tech companies there, so investors see no big payout. There are few IPOs and acquisitions because the local markets are still small and consumers there spend relatively small sums online.

Since the big market and most of the tech dollars are in the US, and many underutilized developers are in places like Dhaka, Bangladesh, the solution is the connect the two at the individual company level. Companies like NewsCred, which recently raised $15 million to fund their fast growth, have already figured this out. NewsCred has one office in New York and another in Dhaka. With C-level executives sitting in each, NewsCred gets the benefits of a huge, low cost talent pool in Bangladesh, and a mature world of investors and customers in the US.

My friend Cal Jahan and I hope to address this with an upcoming series of international hackathons. The hackathons will connect US business people with ideas and potential clients with developers in Dhaka. Connect with me if you’re interested in participating or helping out!

Share on Tumblr