Towards our first Unicorn and seamless e-commerce
Manama: Great minds shun show-offs; they might sit in spartan offices, but surely would be imagining a brave-new- world. Here in Bahrain, at PayTabs, its founder and CEO Abdulaziz Fahad Aljouf sits in an office with minimum luxury and dreams about creating the first Unicorn, start-ups valued at least one billion dollars, from the GCC. And his dreams might revolutionise the Middle East e-commerce.
PayTabs, a payment gateway, was born out of Mr. Aljouf’s penchant for creating solutions. His quest for ideas has taken a dent on his office walls; his brainstorming with his team has resulted in scribbling in all nook and corner of his room.
This serial entrepreneur started as a spices trader, sourcing from Mumbai, India and exporting to the United States. He was working in U.S. during that time and this experience gave him the confidence to plunge full-time to entrepreneurship.
Mr. Aljouf’s first tech-venture passed million dollar mark pretty soon, but soon flopped owing to turbulent U.S economic situation in early years of this millennium.
His foray to entrepreneurship was partly due to the constant motivation from a good friend, who constantly drilled him with the idea of starting on his own. When Aljouf received job offer from a big company in the U.S., his friend showed him Warren Buffet, the legendary investment manager, who used to drive by the place they were staying in Nebraska. His friend told him “can you imagine this company was started by this one man and have you ever thought, it might be you?”
Fortune struck Mr. Aljouf in the form of a project requirement, to be done as part of a degree he was pursuing then in the states: one of his professors asked him to research ‘e-commerce in Middle East.’
He was shocked to learn that there was no e-commerce scene in the region as well as in other countries like India. In U.S., e-commerce has been thriving even then. This made him ponder about starting an e-commerce company in the GCC.
Mr. Aljouf came back from U.S. and started one, but faced innumerable operational challenges in many aspects including logistics and payments. He wondered “why there is no complete e-commerce ecosystem in the region?”
He says even now, if one wants to start an e-commerce business in the region, there are multiple headaches to take care of including running after payment gateway, logistics, buying or building your own platform. “In U.S., a new e-commerce venture can be done without any headaches and what does prevent us from creating a similar ecosystem here?” he asks.
When he realised that the region lacks a good logistics company, he started one and it became a huge success in short time.“I was surprised; we hit 25 pc to 30 pc market share in Bahrain within one year.”
Mr. Aljouf sold off the company later and then concentrated on creating a payment gateway.
He elaborates on his strategy of exiting from his successful ventures, “ I am not exiting completely from the company and I may not be expert in that particular field. I sell to companies who are experts in the business and can grow the business. Also, I keep a share so that I might get a quarter of much bigger cake than having full ownership of a much smaller cake. The game changes.”
“PayTabs, in two and half years, has built everything from scratch. We have a talented team here, including engineers, bankers and marketing professionals. With PayTabs, we were able to create a much bigger success than all my earlier ventures.”
PayTabs received many accolades for its path breaking achievements and Mr. Aljouf was ranked as one among the top five entrepreneurs impacting the region, by Forbes Middle East. But, he says, “we are just touching the surface, we haven’t reached our goal.” DT News had a great chat with this innovator and picked his brain, continue reading:
How far have you reached your goal?
I think, we have touched 30 pc of our goal. Our vision is to change the e-commerce in the region. We are serving hundreds or thousands of companies and our goal is to become a billion dollar company, the first Unicorn from this region.
I want to create an ecosystem where doing e-commerce is easy. In U.S. you can register and start your business by getting company name registered and the tax id issued through a single window, no one will ask for your location, shop, employees and all such details. The numerous running around required to start a business, especially e-commerce, should end.
Why U.S. is able to create many start-ups and even a number of Unicorns and we are not?
I think, the most important aspect is the lack of motivation. Our generation and the coming generation are looking for security. The focus is more on receiving a salary at the end of the month. In our society, there is tremendous pressure to meet the expectations on a constant basis, be it expectations from our family, relatives, professional settings or the larger society or the country. In U.S., even if you look at celebrated entrepreneurs like SpaceX’s Elon Musk, he said that he has to take loans to pay his rent. Entrepreneurship is tough and society needs such entrepreneurs to move forward through innovation. But, we can’t imagine Middle East tolerating someone like that. At PayTabs, even after this growth, I face resistance from individuals and institutions, to conform to the existing modes of thinking and acting. Such a surrounding kills innovation and this is a fight an entrepreneur in this region has to make every single day. The culture of easy money stifles innovation and the value of youth is not being recognized much and a surrounding that ensures free lunch is not good breeding ground for innovation. Bill Gates had earlier answered a question regarding his habit of giving little pocket money for his kids. He said “ I started from zero and he must start from zero.” Proclivity to prefer cushy jobs to starting on one’s own is a bane of our region.
What can be done better in Bahrain?
I always ask everyone who wants to start business, to start in Bahrain. I say this not only to Bahrainis but to everyone in GCC. They tell me that I am bluffing; but after comparing all the GCC countries, I have to say Bahrain is the best place to start business. Bahrain is trying to do a lot of positive things through institutions like Tamkeen. For Bahrainis there are a lot of opportunities to do business and the Kingdom being a small geography is very rewarding, if your idea is a right fit. But, there is a gap between investors and entrepreneurs. It is still difficult for entrepreneurs to raise a hundred thousand dinars. Investors are ready to invest more and more in concrete, like malls, hotels. We have enough malls and office towers here and still more and more are being built every day. Investors need to realize that they stop investing in concrete, time for that is over now. We are in a different era.I tell investors looking to invest like one million dinars, if a certain tower or mall will pay them back in ten years and instead of that if the investors spread the million in 30 or 50 companies, there is a good chance that the initial million would go up five or six times in a couple of years. And, additionally such a process would create many jobs in Bahrain.
Can you specify the gaps existing between investors and entrepreneurs?
Misunderstanding between them is a big issue. Entrepreneurs need to learn to talk in investors’ language. Even myself, I learned to speak investors’ language only recently.
Entrepreneurs are floating above with ideas where as investors are in the ground realities. Both have to come to a middle ground, where vision meets reality.
Not only here, even in U.S. there is a lot of similarity with this scenario.
In Bahrain, people with money may not be necessarily the one who understands technology and they prefer to invest in concrete.
Who should take the initiative to bridge this gap?
I think, organizations like EDB can try to bridge this gap. The incubator they came up recently is a good move and I am very amazed at what they are trying to do through the incubator. Importantly, Bahrain needs to have small funds for seed investments. At present, Bahrain doesn’t have a seed investment fund, funds that can invest less than 50,000 dinars in new ventures. If I ever sell PayTabs, I will build a seed-investment fund for sure. There is no early-stage -investment funds in the region, maybe one or two at the most, can you imagine?
Coming back to your entrepreneur journey, as a serial entrepreneur what are your check lists while starting a venture?
I think a team is what is going to make or break a start up. Second is that one needs to be flexible to change. Even in the case of PayTabs, we started with an idea and completely shifted after the first six months. After that, we went up like boom! Third critical factor is having enough fund during the early phase, ‘no money, no honey.’ It is a struggle for every entrepreneur, controlling the financials. Another important factor is the type of investors the entrepreneurs get on board. It is essential to have investors who share the same vision; because a time will come they will start to change their mind about the business. This is something I learned the hard way.
How do you identify these elements, the right team members and investors?
Regarding team, it starts from my strengths and weaknesses. I always make sure to solve my weakness.Second aspect stems from vision and execution, I look for people who believe in the idea and are ready to take the challenge. Investors also have to be those who understand the idea and believe in it.
The friend who inspired you, as stated earlier, what made him to be constantly behind you to start something?
I worked for him sometime and we were exporting chemicals. He used to tell me” you should stick to this. You are not an employee and have a lot of patience and passion.” I thus started my entrepreneurship journey.
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