AUGUST - SEPTMBER 2016 ┃ Intelligent SME
ISSUE: 33 | AUGUST-SEPTEMBER 2016 facebook.com/theintelligentsme @intelligentsme
Give your brand an unfair advantage
WITHIN TEN YEARS, ROADS WILL BE FULL OF DRIVERLESS CARS 20
UAE AND THE MENA STARTUP ECOSYSTEM: WHERE ARE WE HEADED? Strategic Alliance Partner
Corporate Banking Partner
Sole Automotive Partner
Insurance Partner
16 Print Partner
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To send in your entries, visit
www.innovationsummit.ae
DISRUPTIVE INNOVATOR AWARDS 2016
Disruptive Innovator Awards 2016
Acknowledging innovators who want to change the world! x.
ho think outside the bo
rs w A shout out to innovato
Can your idea, process, software or app pp make
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the world a better pl
Award Categories Best Innovation in Sustainability
Best Innovation in Healthcare
Best Innovation in Education
Best Innovation for Public Good
Best Innovation for Business Growth
Best Innovation in Retail
Who can participate? Any individual or company, based in the UAE, with a commercially viable innovation, is eligible for participation �
How we judge: The awards will be judged by a jury for the strength of concept, user interface, user experience & business model Each category will have two winners The Innovator Awards will be conferred at the Global Innovation Summit on 21st September 2016. �
�
Terms and conditions apply Each participant is eligible to submit a maximum of two entries. Entries should be submitted only through www.innovationsummit.ae Closing date for entries is 28th August, 2016. The decision of the jury will be final.
Disruptive Innovator Awards is part of Global Innovation Summit 2016
EDITORIAL THINK TANK Ajay Bindroo, CEO & Managing Partner, Clasico Brands Within a span of 18 months, Ajay has established a global venture that caters to consumer goods ranging from beauty and Personal Care, Grooming products to Oral Care, Bath and Hygiene, Hair Care and Homecare products. Under the flagship brand of “CLÁSICO BRANDS” over a dozen brands have been created and are in the process of being launched worldwide. Ajay is a true visionary with a big-picture. He's the one who makes sure that the company's concept and strategies are the right ones and that "we're staying on track."
Akram Miknas, Chairman and Founder, PROMOSEVEN HOLDINGS B.S.C.C. (P7H) Akram Miknas is known to be one of the pillars of modern marketing communications in the Middle East. He has just been recognized as No. 3 in the Middle East’s 50 Most Powerful People in Media, Marketing and Advertising. His involvement in real estate development, especially after the successful completion of the Pearl Towers (Abraj Al Lulu), anchored him as a leading accomplished developer in the Gulf. In early 2000, he branched into the hospitality business and successfully managed and built several hotels and outlets in Bahrain. His success in this business was crowned by becoming the franchisee of McDonald’s in Lebanon; where he built the business from 7 restaurants to 26 restaurants in 5 years.
Alexandar Williams, Director, Business Development, Department of Economic
Development (DED)
Alexandar Mathew Williams is presently the Director, Business Development, Department of Economic Development (DED), Government of Dubai. He has logged more than 20 years’ experience in SME development and business creation. His interests are focused on the life cycle dynamics of firm growth and mentoring entrepreneurs. In his present job, his main role and responsibility is developing a new initiatives for DED to take it to the next level as a knowledge-driven economic development agency.
Deepak J Babani, CEO, Eros Group Deepak J Babani has been with Eros Group for over 30 years. Mr. Babani has spearheaded the growth of Eros Group from a turnover of Dhs 6 million in 1981 to over Dhs 4 Billion in 2010. Under his leadership, Eros Group has established itself as the leading distributor for Consumer Electronics, Home Appliances, Telecom, IT and Air-conditioning products in the UAE, GCC and East African regions. Mr. Babani joined Eros as Marketing Manager and was promoted to General Manager in 1988 and subsequently to CEO in 2002.
K. Rajaram, CEO, Al Nabooda Automobiles K. Rajaram has more than three decades of experience in the automotive industry, starting his career in Oman in 1983. He moved to the UAE in 1996 to lead Al Nabooda Automobiles, the exclusive dealer of Audi, Porsche and Volkswagen in Dubai and the Northern Emirates. Under his leadership, Al Nabooda Automobiles has changed the face of the UAE automotive market by setting the highest benchmarks in customer service and pioneering the automobile ownership experience.
EDITORIAL THINK TANK Mishal Kanoo, Deputy Chairman, The Kanoo Group Mishal Kanoo serves as the Deputy Chairman of The Kanoo Group, one of the largest, independent and longest running family owned groups of companies in the Gulf region. He is also one of the most iconic business figures in the Middle East, featured on various magazines and listed in ‘Top 100 Powerful Arabs 2013’, ‘The 15 Wealthiest Arab Businessmen in the World 2012’, among others. Subsequently, he worked at Arthur Andersen in Dubai as an Auditor before taking up his current position in 1997. Mishal Kanoo adheres to family values and ideals in pursuit for quality and excellence which therefore greatly influenced his corporate policies and goals for The Kanoo Group as a reputable company.
Satyajeet Roy, Head of Business Banking (SME) Commercial Bank International Satya is a seasoned international banker with over 25 years of experience in Retail and Commercial Banking with a particular focus on serving SMEs. He has a strong track record of starting and developing businesses across geographies, managing the P&L, and driving innovation to ensure delivery of multi-product banking solutions to meet and exceed customer expectations.Prior to joining CBI, Satya had a long career at Citibank where he was most recently Head of Commercial Banking for UAE and Bahrain. During his time at Citi, Satya held various senior management roles in India, Middle East and the UK.
Rizwan Sajan, Founder & Chairman, Danube Group The Danube Group was founded and established by Mr. Rizwan Sajan in 1993. Over the last 22 years, the group has come a long way since its humble beginnings of a small trading shop in Deira to being the region’s leader in construction, building materials, home interiors and shop fitting industries. The head office & logistics facilities are present at the Jebel Ali Free Zone (JAFZA). Danube has coursed a path that transformed only one shop with 3 employees to over 40 locations in 9 countries worldwide including UAE, Oman, Bahrain, Saudi Arabia, Qatar, Africa and India, in addition to procurement offices in China with an employee strength of over 2,200 people. Being a top ranking business icon, Mr. Rizwan Sajan has been a source of inspiration for driving Danube’s business by leaps and bounds.
Reg Athwal, Founding Partner & MD of RTS Global Partners Reg Athwal is the Chairman of RAW Group and the Founding Partner & MD of RTS Global Partners, the leading family business advisory firm in Africa, Middle East and Asia with 50+ members in 8 countries, with offices in Dubai-UAE and Nairobi-Kenya.
Vikas Thapar, Chief Executive Officer, Emirates Money Vikas heads Emirates Money as its CEO. He was instrumental in the conceptualization and establishment of the company and continues to drive the growth and direction of Emirates Money. Vikas possesses more than 17 years of experience in the consumer finance industry and has worked with Citigroup in India and Indonesia. In his previous assignments with Citigroup, he played a prominent role in setting up the consumer finance business for Citigroup in Indonesia and was an integral part of the consumer finance set-up team at Citigroup India.
AUGUST - SEPTMBER 2016 ┃ Intelligent SME
CONTENTS 16
16 UAE and the MENA Startup
Ecosystem: Where are we headed? With all the positive outcomes and hysteria of startups in the West, it was always assured that these enterprise efforts would slowly creep their way to the East. In that regard, recent years have seen some great initiatives coming out of the MENA region, with many millennials opting for the entrepreneurial route over traditional professions.
20
Within ten years, roads will be full of driverless cars
Driverless cars may not be a gradual shift on roads. Instead, entire cities could from flip from having all human drivers to all autonomous vehicles quickly.
26 Omnichannel retailing a friend or a foe?
Consumers expect brick-and-mortar stores to keep up, offering the same kind of integration in their complete shopping experience. They expect to be able to order items online, have them shipped to their house and return them in the store – a seamless experience between online and brick-and-mortar.
6 www.theintelligentsme.com
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AUGUST - SEPTMBER 2016 ┃ Intelligent SME
CONTENTS 28
44
28 Whatever happened to
36 Social influence marketing
We must be flexible in our planning in the knowledge that the business environment today will almost certainly be very different from in a couple years. We should embark on business plans with a worst case scenario in mind.
Understanding how social influence marketing works can help companies to provide with information that prospective customers are looking to make a decision, and can also provide positive business outcomes for that organisation.
five year plans?
30
boosts your business
Growth fears: Aligning business 38 Unleash Your growth with employee satisfaction Family Business DNA
A risk associated with business progress is employees becoming increasingly disengaged in the workplace due to heavier workloads, pressures, and deadlines. According to the Epicor research, 43% of leaders are concerned that as their business grows, workloads may increase to a level that places too much pressure on staff, prompting key personnel to leave the organisation.
34 Targeted marketing has
never been easier, especially in social networks
GEORGE DEEB, Managing Partner at Chicago-based Red Rocket Ventures explains key marketing strategies that utilise popular social lnetworks.
An employee will never feel or think like you about your business, unless they have some "skin in the game,� says Reg Athwal, Chairman of RAW Group and the Founding Partner & MD of RTS Global Partners
44 9 Ingredients of a Successful
Digital Marketing Strategy for SMEs in the Middle East After 8 years working in the UK digital marketing industry I was really keen to see how things differ in the Middle East, a region with one of the fastest growing economies where digital uptake should be strong.
Be a Connector 7 www.theintelligentsme.com
AUGUST - SEPTMBER 2016 ┃ Intelligent SME
ISSUE: 33 | AUGUST-SEPTEMBER 2016 facebook.com/theintelligentsme @intelligentsme
Give your brand an unfair advantage
Publisher's Note 20 WITHIN TEN YEARS, ROADS WILL BE FULL OF DRIVERLESS CARS
UAE AND THE MENA STARTUP ECOSYSTEM: WHERE ARE WE HEADED? Strategic Alliance Partner
Corporate Banking Partner
Sole Automotive Partner
People rubbed their eyes in disbelief when a regional transportayion player announced that it had signed an agreement to bring battery-powered, self-driving electric pods to the MENA region. We predict that public sentiment will swiftly change from, "Oh, we are talking about the distant future," to "Are we there yet?" Such is the march of technology and innovation. In this issue, we have brought you a complete snaposhot of the driverless car phenomenon that is eclipsing any other discussion in the automotive world.
16
Insurance Partner
Print Partner
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We also interviewed the Dubai-based startup Cary! about the opportunities and threats that come with its adoption of a human-to human business model. Cary! is a social media mobile app that makes it easy for people to buy and sell used items from people around them and it is one of the recent entrepreneurial successes. Another regional entrepreneurial success we feature is Jamalon, a publish-ondemand service that aims to expand access to knowledge, opportunities for learning and combat high illiteracy rates. The company has grown to become the largest online book retailer in the Middle East, delivering 10 million Arabic and English titles while forging relationships with Arabic and English publishers. The seismic news that we analyse in this issue is the impact of Brexit. In the aftershock of the United Kingdom’s decision to leave the EU, valuations seem more driven by a cyclical crisis of confidence rather than signs of a significant deterioration of fundamentals. And finally, in light of the widespread accepatance that social networks and digital marketing can play a pivotal role in growing startups and creating brands with a higher ROI than ever before, we have also featured a few stories that will help entrepreneurs create the best marketing outcomes for their businesses. I wish you well as you look forward to the end of summer and the resumption of the good life. Happy reading!
Shantanu Phansalkar, CEO & Publisher, SPI Group.
Disclaimer
SPI Publishing has endeavoured to bring out a publication that is reliable and informative. This is true to the best of our knowledge. The opinions presented are those of individual writers and not necessarily endorsed by SPI Publishing. The content in this magazine is protected by copyright law and is copyright to SPI Publishing unless credited otherwise, and may not be copied, reproduced or republished for any commercial purpose or financial gain.
AUGUST - SEPTMBER 2016 ┃ Intelligent SME
BUSINESS ANNOUNCEMENTS
DED sees 16.3% rise in commercial permits in H1 2016 as businesses ramp up marketing efforts
85% increase in trade fair permits; advertising campaigns see 32.3% growth Dubai, 28 July 2016: Commercial permits issued by the Department of Economic Development (DED) in Dubai to companies for various activities like marketing
campaigns, sales promotions and exhibitions increased 16.3% over the first six months of 2016 compared to the first half of 2015. Altogether 13,566 commercial permits were issued by DED in H1 2016, indicating robust business development efforts and competition among firms to sustain business and connect with existing as well as potential customers. A total of 389 permits were issued for exhibitions during H1 2016 compared to 210 permits recorded during the first half of 2015. Permits issued for companies to engage in multiple promotional activities increased 33.3% - from 1,807 in H1 2015 to 2,408 in Hi 2016 – indicating a strong demand for diverse marketing strategies. Permits for promotional campaigns issued during H1 2016 also increased 13.6% compared to the same period of the previous year and reached 3,664, while permits for business forums rose 14.3% to reach 136 as Dubai strengthened its credentials as a destination for new projects and businesses.
AUGUST - SEPTMBER 2016 ┃ Intelligent SME
BUSINESS ANNOUNCEMENTS
Careem To Bring Driverless Transportation To The Mena Region CAREEM, the region’s leading app based booking service, today announced a strategic partnership with NEXT Future Transportation, Inc. to bring battery-powered, self-driving electric pods to the MENA region. The partnership comes on the heels of His Highness Mohammed bin Rashid Al Maktoum’s announcement of the launch of the Dubai Autonomous Transportation Strategy, a new initiative aimed at making 25 percent of all transportation trips in Dubai be smart and driverless by 2030. The initiative requires innovation, experimentation and the participation of companies working to transform the current transportation industry across the UAE. The pods, which are electric and driverless, can drive individually or by attaching themselves to other pods to form a bus-like structure where travelers will be able to move freely from one pod to another. This technology will be the
first of its kind in the region, and the partnership between NEXT and CAREEM will bring a new wave of transportation infrastructure to the Middle East that is safer, more efficient and environmentally friendly. The NEXT self-driving electric pods are designed to operate as a mass transportation system that shuttles people from door to door. The pods will pick passengers up on demand and link together in bus-like form on the journey to get each person from point A to point B as efficiently as possible. Together, CAREEM and NEXT are co-innovating to help solve some of today’s more troubling mass transit problems, including minimizing congestion and pollution. Additionally, by providing personalized pick-up and drop off of users, NEXT and CAREEM will help make the daily commutes of all UAE citizens more efficient and quick.
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AUGUST - SEPTMBER 2016 ┃ Intelligent SME
BUSINESS ANNOUNCEMENTS
Solar Impluse-3 completes fossil fuel free round-the-world journey
Solar Impulse-2 received a warm welcome today at Abu Dhabi’s Al Bateen Executive Airport, 16 months after its departure from the airport on a 35,000 km round-the-world trip. The aircraft completed its record-breaking journey using only solar power. Director-General of International Renewable Energy Agency (IRENA), Adnan Z. Amin, said: “I am delighted to congratulate Solar Impulse on its pioneering round-theworld flight fuelled entirely by energy from the sun. This remarkable accomplishment is a clear signal that the age of
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renewable power is here to stay. IRENA is proud to have supported the project as one of its partners. Solar Impulse has raised awareness about the promise of renewables, showing that they can provide sustainable, reliable energy. It has also pushed technological boundaries forward and is a testament to the importance of innovation and international cooperation in realising a sustainable energy future. For this, Solar Impulse pilots Bertrand Piccard and André Borschberg now join the elite club of pioneering aviators. This impressive feat is another proofpoint that we have entered a period of sustained growth for renewable energy. Today, we are seeing renewable energy costs fall and investments soar to record levels – such that renewables are competing head-to-head with power from other energy sources. As a result, more renewables are being added to the global power generation mix than from all other sources combined. Even with this progress, more must be done if we are to meet global targets on climate and sustainable development. I am confident that with more of such pioneering endeavours, like the one completed today, we will rise to meet and overcome the challenges that lie ahead.”
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AUGUST - SEPTMBER 2016 ┃ Intelligent SME
BUSINESS ANNOUNCEMENTS
Effect of UK Poll Result on Global Economy Unclear
The shock of the UK referendum decision and the resulting extremes in bond market pricing across the world were in some ways suggestive of past systemic episodes, such as the 2012 eurozone crisis and the global financial crisis of 2007–2008. Yet although fixed income investors appeared swift to conclude a significant weakening of global economic growth was all but assured, other markets were less reactive, with signs of stress relatively hard to find. Indeed, following the release of the strong US payroll number for June, the S&P 500 rallied to close near a record high, leading to the unusual scenario of simultaneous strength in bond and equity markets. Currencies, however, did reflect the scramble by investors for perceived havens, and the US dollar rallied sharply following the UK result, eradicating its previous losses in the second quarter on a trade-weighted basis. The Japanese yen remained the haven of choice for many, building on its strong showing so far in 2016 and moving close to the ¥100 level against the US dollar. In an indication of the potential for contagion, Mexico’s central bank was forced to raise interest rates to defend the Mexican peso—the most liquid and widely traded emerging- market currency— which had weakened as investors fled emerging-market assets in the immediate aftermath of the UK poll. But in general, riskier asset classes, including those in emerging markets, held up well after an early markdown. An initial spike in risk aversion among investors gave way to a renewed search for performancempotential, once it became clear markets had coped with the shock of the UK result and sovereign bond yields were heading even lower. Corporate bonds saw strong inflows, and the dwindling prospect of a rise in US interest rates supported emerging-market assets, as they are seen as likely beneficiaries from capital flows if global monetary policy stays loose. Oil prices at first showed little reaction to the UK vote, remaining close to the US$50 per barrel mark, but they started to lose ground in early July as supply disruptions eased, with figures showing production from OPEC (Organization of the Petroleum Exporting Countries) reaching an eight-year high in June.
Assessing the way forward is now even more challenging, since the political and economic uncertainty created by the UK referendum result has further obscured the global outlook, although clearly there are few obstacles in the way of lower interest rates. Central banks in many parts of the world were already committed to substantial monetary easing to combat deflationary forces, and those that were not—such as the Fed—now have little incentive to swim against the tide. The forces of populism that have been unleashed since the global financial crisis show little sign of diminishing, raising the possibility of further rejections of the marketfriendly orthodoxies of globalization through the ballot box. Nevertheless, we would question whether the extraordinary valuation metrics currently found across bond markets—with, for example, both the German and Japanese yield curves largely negative—are justified by the possible outcomes for the global economy. In the aftershock of the United Kingdom’s decision to leave the EU, such valuations seem more driven by a cyclical crisis of confidence—which, in our opinion, should recover at some stage as the most extreme outcomes become less probable—rather than signs of a significant deterioration of fundamentals. UK Poll Result Likely to Create Prolonged Uncertainty Across Europe The decision by UK voters to leave the EU triggered a sharp reaction in European markets, most notably in the country where the referendum took place. UK Gilt yields quickly moved to historic lows, amid widespread predictions that prolonged uncertainty about the timing and manner of the United Kingdom’s eventual exit from the EU would push the country into recession. The British pound fell sharply, slumping to its lowest level against the US dollar in more than 30 years. In an echo of the global financial crisis of 2007– 2008, several UK real estate investment funds suspended trading after a wave of redemptions by investors. But the effects were by no means confined to the United Kingdom, as the prospect of political impasse threatened to significantly undermine confidence across Europe, and particularly within the eurozone. German Bunds were in such demand 10-year Bund yields turned negative and by early July had approached -0.20%. Yields on equivalent-maturity bonds issued by Denmark and the Netherlands also moved into negative territory, while the Swiss government bond market, another area seen by investors as a safe haven, became negative-yielding across all maturities. The UK referendum result led to renewed doubts about the stability of the rest of the EU, and consequently spreads between the debt of most non-core eurozone countries and German Bunds widened, although the general downward pressure on yields lessened
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AUGUST - SEPTMBER 2016 ┃ Intelligent SME
BUSINESS ANNOUNCEMENTS
the impact of such moves. However, the state of bond markets did contribute to a widespread selloff of European banking shares in the aftermath of the UK vote, as the drop in interest rates threatened to further undermine banking profits. The falls were greatest among Italian banks, many of which have been struggling under a heavy load of unprovisioned bad loans, a weakness that seemed likely to be highlighted by ECB stress test results due to be released in coming weeks. The deteriorating sentiment surrounding the Italian banking sector increased tension between the Italian government and the EU, with the latter authorizing some government measures to assist the short-term liquidity of Italian banks, but firmly resisting any more comprehensive state assistance that might undermine the EU’s new rules aimed at forcing creditors to bear thebrunt of rescuing troubled banks. The UK referendum’s shock result also had the effect of increasing the focus on Italy’s forthcoming plebiscite, which is due to take place in October. Italian Prime Minister Matteo Renzi called the poll to gain approval for proposed constitutional reforms and has staked his political reputation on a successful outcome, but after UK voters delivered such a bloody nose to their government, speculation grew about whether another such populist upset could occur in Italy. With the UK economy struggling to adjust to the changed political and economic landscape, the BOE was active, making reassuring noises on monetary policy and
UK banking liquidity. The ECB kept a lower profile, since the market stresses in the immediate aftermath of the UK result were less striking than many participants had expected. European equity markets sold off but then stabilized fairly quickly, while the euro had a modest fall against the US dollar. The ECB’s recently started purchasing program and the sharp drop in sovereign yields provided support for eurodenominated corporate bonds, though the UK corporate bond market fared less well. In terms of monetary policy, we had expected the BOE to move into easing mode, though it chose not to do so at its July meeting, but we think the ECB will try to gauge the impact of the UK result, rather than rush to expand or extend its current program of bond purchases. Regarding negotiations between the United Kingdom and the EU, they could be extended and painstaking, given the stakes for each party, and both sides seem likely to stick to their entrenched positions. The United Kingdom will probably be reluctant to be forced into an accelerated path to exit the EU, with all the constitutional issues such a move potentially raises, and the EU authorities could take a tough line to discourage other member states that might be questioning their own future within the union, with the additional complications of French and German elections looming in 2017. However, the longer the United Kingdom’s position remains unresolved, the greater the negative impact on both parties could be.
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AUGUST - SEPTMBER 2016 ┃ Intelligent SME
Startups
UAE and the MENA Startup Ecosystem: Where are we headed?
With all the positive outcomes and hysteria of startups in the West, it was always assured that these enterprise efforts would slowly creep their way to the East. In that regard, recent years have seen some great initiatives coming out of the MENA region, with many millennials opting for the entrepreneurial route over traditional professions. 16 www.theintelligentsme.com
AUGUST - SEPTMBER 2016 ┃ Intelligent SME
Startups
A
s startup traction builds in the MENA region, and particularly the UAE, we find various types of businesses and industries moving from classic modes of operation to more techreliant systems. And with the startup ecosystem expanding, consumer behavior is changing and new forms of business are simplifying means of interaction. The proliferation of new startups in the region presents a huge opportunity for investors and entrepreneurs as well as to continue capitalizing on new found tech in order to enhance the regions capacity with internet structures; bridging the gap with other pioneering cities like London, New York, & Silicon Valley. Recent years have seen the rise of an increasingly potent group of cities around the world that are generating new startups in creative and unique ways. Silicon Valley in particular, has set the tone for the explosion of new found concepts coming to life in the field on internet innovation, which has paved the way for an entrepreneurial revolution focused on connecting the modern world through various means and notions. The global dispersion of simple ideas such as Facebook, WhatsApp and Uber have allowed for an increased risk taking movement which has given hope to entrepreneurs all over to push ever so firmly for innovative concepts to come alive. As a result, we find ourselves in an evolving race to change and enhance industries in even the smallest circumstances. As technology spreads allowing for increased, cheap, and flexible access to the internet, we find that many new ventures have allowed for transparency between people across the globe; resulting in extensive forms of collaboration. With increased awareness of disruptive opportunities and an easier access to global talent, taking the risks involved for the development of startup opportunities has never been so easy. Additionally, a huge upsurge in investment and intellectual capital has become available to many who show promising and cutting edge “early stage� ideas. Although there is great risk and a unknown hills to climb, VC firms, Crowdfunding Platforms and Angel Investors have come together to compete and provide resources for the
progress and development of these initiatives. While a majority of startups fail, backers are finding that with a broad portfolio, one single success story may reap all the rewards to make up for the risks involved. It is, needless to say, the amount of support, mentorship and legal protection provided to startups in the recent years has resulted in an array of goods and services that have revolutionized industries on an international scale. With all the positive outcomes and hysteria of startups in the West, it was always assured that these enterprise efforts would slowly creep their way to the East. In that regard, recent years have seen some great initiatives coming out of the MENA region, with many millennials opting for the entrepreneurial route over traditional professions. In a region constantly behind, with regard to technology and innovation, access and advancement of internet operations have recently allowed for new initiatives in the online and mobile space.
The UAE in particular has seen rapid growth in e-commerce due to its technological development and dynamic cluster of talent. As the basic building blocks for digital services and products have been established, more support for startup initiatives have been developed.
With vast resources available to the region in terms of talent and infrastructure, a collaborative effort to provide solutions to the various problems faced was inevitable. Dense cities like Cairo, Amman, Dubai and Beirut have taken the lead in capitalizing on opportunities within each local market. Obvious gaps in their market sectors have given plenty of opportunities to young Arab entrepreneurs to disrupt traditional segments with innovative ideas. Although some have succeeded, there is still resistance and difficulties faced in challenging traditional industries. The lagging appreciation of E-commerce and a premature online infrastructure has resulted in the slow development of startups in the region; which in turn has also been the reason for cautious investment. But an increasing insurgence of mentorship has been infused to guide visionaries to the Promised Land. One thing is for certain, the MENA region has opted to follow business models that have already been proven abroad rather than lead innovation. These structures have been perceived as minimal risk by founders and investors alike. Those with unproven yet disruptive funnels have found it more difficult due to a lack of understanding in nurturing and scaling these new found models. Conversely, with the continued emergence of Entrepreneurs, VC funds, Angel Groups, Accelerators and support organizations there is plenty of hope for unprecedented growth in the MENA startup ecosystem, and a proven growth of localized ideas to serve local markets. The UAE in particular has seen rapid growth in e-commerce due to its technological development and dynamic cluster of talent. As the basic building blocks for digital services and products have been established, more support for startup initiatives have been developed. Along with support from the government, mentorship programs and local accelerators have blossomed in both Dubai and Abu Dhabi and encourage entrepreneurial risk taking. Local success stories such as Dubizzle, Careem, and Namshi have paved the way and given hope to those who wish to follow. These examples in particular have been established on proven structures
17 www.theintelligentsme.com
AUGUST - SEPTMBER 2016 ┃ Intelligent SME
Startups
which in turn have brought about increased success due to familiarity amongst the present multicultural population. As the rollover of proven prototypes continues to conquer the UAE ecosystem, the opportunity
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that have been created exclusively to serve the local market itself. Concepts such as Bayzat, MallMate, and Lamsa are amongst a few that have been created exclusively to serve the local market. Truly innovative and unheard of concepts may have had a tougher road to success in the UAE but as time endures; the progress of mentorship programs, funding resources and enhanced internet structures have made it easier to progress and gain traction within this market. With the immense growth of startups in the UAE, various industries and lifestyle habits are being disrupted and improved through various means. Simple platforms have made it quicker and easier for consumers to run errands. Food delivery, grocery shopping, dry cleaning and many other tasks have now become effortless with a simple click. As the region becomes more dependent on web and mobile advancements, there seems to be no stopping the ever flowing torrent of quick fix ideas and pioneering
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Startups solutions. With the new generation of pioneers it is expected that upcoming forms of technology such as virtual reality, 3D printing and augmented reality will be incorporated towards ideas that not only simplify our daily lives but provide addictive forms of entertainment. One thing startups in the UAE must look at is the time lapse for new technology to establish itself in the region. Recent patterns have shown that tech trends from App structures to new business models lag when moving from West to East, which in turn slows down the process of innovating. This has been a problem for a few startups who adapt on technology too late and find themselves losing out to fresher inventions that are, in some cases, updates of previous technology. To ensure things like this don’t happen, the upcoming generation of entrepreneurs must ensure that they are able to take advantage of technologies coming through the West and capitalize on ideas fast enough to make a significant impact in the market. With the ecosystem in the MENA region and the UAE in particular looking bright, there is much to do in order to sustain the growth of startups in the region. Moving forward; Funders, Entrepreneurs, and Service Providers must work collaboratively to enhance established modes to reflect advances in the West. As the region experiences growing demand in the form of new age technology, we see a market incredibly eager to adapt. Reliance on E-commerce and mobile systems proves that the market is ready to take transform with the ideas being introduced by creative young minds in the region. With better internet infrastructure, government support, and homegrown talent there is no stopping the influx of new age business models entering the MENA region. The way forward for the region and the UAE, is to ensure consistent growth in the ecosystem, which rests in the development and alignment of the tech community, media, web framework and legal structure. Moreover, with eyes turning to the UAE as the leading habitat for new ventures, times are proving that the market and infrastructure are sufficiently ready to welcome new chapters of change. The question remains; will the new age of pioneers in the UAE lead the rest of MENA into a lucrative technology transformation? Only time can tell.
Jassem Osserian joined PHD Media in 2015 and is based out of Omnicom’s Dubai office.
AUGUST - SEPTMBER 2016 ┃ Intelligent SME
COVER STORY
Within ten years, roads will be full of driverless cars Driverless cars may not be a gradual shift on roads. Instead, entire cities could from flip from having all human drivers to all autonomous vehicles quickly.
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AUGUST - SEPTMBER 2016 ┃ Intelligent SME
COVER STORY
T
wo reasons why right now is the perfect time for driverless cars and a couple of technology trends are making driverless cars possible: • Artificial intelligence — specifically deep learning — has improved significantly. • The technology needed to build driverless vehicles continues to get cheaper and become more accessible. Deep learning is the ability for machines to use algorithms to analyze data and solve problems. And recently, deep learning algorithms have become very accurate. Dixon cited the 2015 ImageNet challenge, an annual contest where computer scientists build algorithms to recognize objects in images and videos. A few years ago, deep learning algorithms in the competition were wrong about 30% of the time. But last year, the error rate dropped to under 5%, making the algorithms more accurate at object recognition than humans. To build an autonomous car, machine vision accuracy is critical. Vehicles need to be able to see and understand the world in real time, then make decisions accordingly. All of the trends we’ve been observing over the last decade — from cloud computing to cheaper processing — have hit a tipping point. This is the core that’s getting people excited about AI, and specifically around autonomous vehicles and autonomous cars. It's also cheaper than ever to build a smart car. Many driverless car companies use tiny chips made by a publicly-traded company, NVIDIA. NVIDIA's chips only cost a couple hundred dollars. For $200, you could get what 10 years ago was a supercomputer on a little board and put it in your car, and it can run one of these sophisticated deep learning systems. Additionally, a lot of the AI for autonomous vehicles is open-sourced, like Google's product TensorFlow. This allows everyone in the space to create more accurate technology faster, because they can learn from each other's data sets and build off the findings. In about 2 years, you'll be
chauffeured around in driverless cars on highways Many cars already have self-driving features, like Tesla's AutoPilot, smart parking assistants and automatic lane-changing functionalities. Those features will continue to improve, Dixon says, until cars become fully autonomous. Some types of driving are easier to automate than others. Highway driving and parking, for example, are much easier for autonomous cars to master than city driving, because there are fewer unpredictable obstacles, like pedestrians and bikers. Companies like Uber and Lyft will become hybrid networks, offering both driver and driverless solutions depending on where you need to go. Companies like Tesla and Comma. ai already have driverless features. But they're solving the relatively easy driving problems autonomous vehicles face on the road and leaving bigger challenges alone for now. Other companies like Google and Uber seem to be building fully-autonomous cars that will be ready for any driving scenario. Google says its driverless cars have already driven more than 1.5 million miles. Dixon thinks a lot of what Google has already built could probably be used on roads today with a lower accident rate than humans, who are accident-prone, easily distracted, and—in some cases—intoxicated. But the public may not be ready for driverless cars just yet.
Companies like Uber and Lyft will become hybrid networks, offering both driver and driverless solutions depending on where you need to go. Companies like Tesla and Comma.ai already have driverless features.
Regulations will change quickly because of a global autonomous race Even if the technology for driverless cars is nearly ready, are governments and law enforcement ready for selfdriving cars? A global interest in autonomous vehicles could speed regulations along. Already other countries are moving aggressively into the space. China is especially forward-thinking and has kicked around the idea of converting cities to entirely driverless hubs with multi-year rollout plans. Some US cities are already looking into it. And a lot of road decisions are handled on a municipal, not a state or national, level. For example, the mayor of Beverly Hills recently visited Silicon Valley and was interested in creating a driverless city. With cars, you have a dynamic that is going to be very amenable to fast-moving regulatory change because tons of people are employed in it, it’s seen as strategic by lots of large countries, and there isn’t really a countervailing industry fighting against it. Obviously, there will be people concerned about safety — as they should be. But for the most part, I think people see it in the public interest to advance this field. Entire cities will flip from drivers to driverless all at once, and they'll change how we live and commute Driverless cars may not be a gradual shift on roads. Instead, entire cities could from flip from having all human drivers to all autonomous vehicles quickly. Parking spaces — which may take up 25% of city real estate — could be largely removed since people won't need to own cars. That means more room for parks and expanded sidewalks. Autonomous vehicles would likely be electric, which would help keep air clean. There would be no street signs, because driverless cars won't need them. And fewer human drivers means less unpredictability and more vehicle coordination, which means fewer traffic jams. By making everything autonomous, you could dramatically simplify the [technology] problem because you wouldn’t have robots trying to predict
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AUGUST - SEPTMBER 2016 ┃ Intelligent SME
COVER STORY
Source: Google
what humans are doing and all of the cars could talk to each other and coordinate. It would be kind of like an ad hoc subway system. They would automatically follow each other. I think it would be very safe ... One of my guesses is that this will happen in a few cities, it will be awesome, and people will be like, 'This is paradise.' You just push a button and a car pop ups and takes you wherever you want to go. You have more pedestrian space, and the air smells better. If that happens in a few cities and it works really well, it could spread virally from there. It's hard to predict everything that will change as a result of widespread driverless cars. But at a minimum, they'll change how we live and commute. Suddenly, you can work in your car while you commute. And you can imagine, if self-driving cars work well, it should dramatically reduce traffic jams because the cars can all communicate with each other. History suggests that these things have a dramatic impact on all sorts of things in ways you don’t predict," says Dixon. "Like I don’t think that anyone in 1905 was predicting fast food and the suburbs and big box retail and all of these other things that happened [as the result of cars]. Within 10 years, we won't own cars, we'll just hail them Right now, it's hard to imagine not owning a car. But in the future, selfdriving cars won't be purchased by the
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Within 10 years, we won't own cars, we'll just hail them Right now, it's hard to imagine not owning a car. But in the future, self-driving cars won't be purchased by the masses, only the wealthy. masses, only the wealthy. And driving a car yourself will be a hobby, not a necessity. Big car companies are "freaked out" and "excited" Andreessen Horowitz doesn't just help startups. The firm also has a program that helps older companies understand and adapt to industry changes. And lately, a lot of the program's visitors have been older car companies. Ford, GM, BMW —their view of the world is, 'We don’t want to become like Blackberry.' They’re both freaked out/excited. They're excited because... it’s a relatively sleepy industry, and
there’s new stuff happening. But a little bit freaked out too because they don’t want an iPhone or Android to come around and make them Blackberry or Motorola. Some of the companies have embraced autonomous changes and partnered with startups in the space. General Motors, for example, penned a big partnership with Lyft and purchased Cruise, a startup building self-driving technology. Toyota invested in Uber. But others aren't ready to accept what's about to happen. Generally, companies that have direct relationships with consumers win. While car brands currently own that relationship, they're at risk of losing it to dispatch networks if people start hailing rather than buying cars. If a user is a loyal Uber rider, for example, they don't care what type of car they get picked up in as long as the experience works. The one thing they have going for them is years of manufacturing experience. But increasingly, cars don't just require manufacturing, they require software. The real hold up on driverless cars isn't technology — it's all of us In May, the first death caused by Tesla's AutoPilot feature occurred. A man who was using the feature on a highway and reportedly watching a DVD while the car manned the road hit a truck and then crashed into a power pole. The accident made global headlines. One article in Fortune got a passionate response from Tesla founder Elon Musk: "Indeed, if anyone bothered to do the math (obviously, you did not) they would realize that of the over 1M auto deaths per year worldwide, approximately half a million people would have been saved if the Tesla autopilot was universally available," Musk wrote to Fortune. While Musk's stat on car-related deaths may be accurate, the question looms: Will humans be forgiving of fatal crashes if they're caused by machines, rather than people? In probably 5 years, you’ll have autonomous cars that work as well as people, even in cities. But
AUGUST - SEPTMBER 2016 ┃ Intelligent SME
COVER STORY
whenever there’s an accident with an autonomous car it’s headlined everywhere. Even if you have the perfect computerized, autonomous vehicle, there are still going to be accidents because you’re interacting with the real world ... And then the question is: how does society deal with that? Do we accept the accidents, or are people just horrified by the idea of robots causing them? Meanwhile, humans are texting and they’re drunk and all sorts of things. But we’re used to it. Dubai on the right road for the driverless cars phenomenon The proclamation made by Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai, that a quarter of all journeys will be made in driverless vehicles by 2030, could lead to the city becoming a magnet for investment and pilot projects, according to one expert. Lee Woodcock, global product director for intelligent mobility at the engineering consultancy Atkins, said that although there are many companies and research institutions around the world pumping money into connected (semi-autonomous) and autonomous vehicles, there are few cities and countries embracing them. “For me, one thing that is quite frustrating is that there are two worlds that are not coming together," Mr Woodcock said. “We’ve got the OEMs [original equipment manufacturers] and the automotive world that is doing some fantastic work around connected and autonomous vehicles, but then you’ve got the infrastructure and network managers, who manage cities and their road networks. At the moment, those two worlds are not coming together. And they need to." He said that the statement made by Sheikh Mohammed in late April that 25 per cent of journeys in Dubai will be made via driverless vehicles by 2030 “is exactly the right thing to do. It’s someone being serious and providing leadership and clarity about what we are going to do". Atkins is working on two major UK government-backed research projects
into intelligent mobility, which is predicted to be worth £900 billion (Dh4.77 trillion) a year by 2025. It is part of a team researching levels of trust and acceptance in driverless cars, but also the legal and insurance implications of their use. It is also involved in a project assessing how the technology can be used to offer greater independence to older people. The company has produced a white paper arguing that for intelligent mobility to thrive, six fundamentals have to be in place: digital and physical infrastructure, data capture and exploitation capability, cybersecurity, leadership and partnership between developers and city chiefs. The first four can be generated almost anywhere, Mr Woodcock said, but the last two are more difficult to replicate. “If you’re creating an environment where the private sector knows that a city is serious about its ambitions for driverless cars, you can start to develop world-leading international test centres where people would want to come and validate their services and new technology in a safe manner." He said trials could start within “safe" environments such as ports and airports, where repetitive tasks such as refuelling planes and transporting passengers could be carried out by autonomous vehicles. And although autonomous vehicles are already being touted as a more efficient and safer than today’s cars – allowing for the creation of “freight trains", for example, where heavy goods vehicles are bunched closely together to increase road capacity – Mr Woodcock said work needs to be done on this transition. Oliver Plunkett, the Middle East managing director of engineering consultancy BuroHappold, said he believed the 25 per cent target could be introduced through fairly simple measures, such as segregating lanes on the Dubai-Abu Dhabi motorway and other major routes. “We need to be confident as a society that this change is a revolution in the way we transport ourselves, rather than an evolution.“As engineers,
Hydrogen is the energy of the future for Japan To become reality, Tokyo’s dream to have approaching 1 million hydrogen fuel-cell vehicles on Japan’s streets in 15 years time will require huge investment and major government support, analysts say. A March report by Japan’s ministry of economy, trade and industry projects putting 40,000 hydrogen fuel-cell cars on the country’s roads by 2020, with a 20fold expansion to 800,000 by 2030. Currently, about 400 such vehicles operate in Japan, the report says. The report also outlines plans to double the number of hydrogen fuelling stations to about 160 by the end of the current fiscal year next March, doubling it again to 320 over the following five years. Prime minister Shinzo Abe has called hydrogen “the energy of the future," one that would allow Japan to diversify energy sources and cut carbon dioxide emissions. The global Japanese car manufacturers Honda and Toyota are advocating fuel-cell vehicles to eliminate exhaust emissions – hydrogen-powered cars emit only water – while offering range and refuelling times similar to petroldriven vehicles. Fuel-cell cars use hydrogen gas to power an electric motor. Unlike conventional vehicles which run on petrol or diesel, fuel-cell engines combine hydrogen and oxygen to produce electricity, which runs the drive motor. Since they are powered entirely by electricity, fuel-cell vehicles are considered electric vehicles. However, as opposed to current battery-powered electric vehicles, their range and refuelling figures are comparable to conventional cars and lorries.
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COVER STORY
we have a responsibility to [think] what the ultimate solution should be." Connected, self-drive cars pose serious new security challenges In a world where motor vehicles can be weapons and cars increasingly depend on internal computers and internet connections, automakers are under increasing pressure to find ways to guard against cyber-attacks. Auto industry chiefs, security experts and government officials warned at an auto industry conference here Friday that hackers can threaten to do everything against cars that they do to other computers: remotely steal owner information, or hijack them and render them more dangerous. “When you look at autonomous autos, the consequences are so much greater” than the Nice attack by a possibly Daesh-inspired man, said John Carlin, assistant US attorney general for national security, “We know these terrorists. They don’t have the capability yet. But if they’re trying to get people to drive truck into crowds, than it doesn’t take too much imagination to think they are going to take an autonomous car and drive it into a crowd of people,” said Carlin. General Motors’ chair and chief executive Mary Barra said that the advanced information technology that comes in new cars, especially “connectivity” systems linking cars to the internet, creates huge new
challenges. “One of these challenges is the issue of cybersecurity, and make no mistake, cybersecurity is foundational,” she said. Barra pointed to the need to protect the personal data of customers who use their in-car system for banking or to pay for other services. “The fact is personal data is stored in or transmitted through vehicle networks,” she said. On top of that is the complexity of the newest auto IT systems, which, she said, “opens up opportunities for those who would do harm through cyberattacks.” “Cyber security is an issue of public safety,” she said.
Toyota to build artificial intelligencebased driving systems in 5 years
CEO Pratt said the company aims to improve car safety by enabling vehicles to anticipate and avoid potential accident situations Toyota Motor Corp is targeting developing in the next five years driver assistance systems that integrate artificial intelligence (AI) to improve vehicle safety, the head of its advanced research division said. Gill Pratt, CEO of recently set up Toyota Research Institute (TRI), the Japanese automaker’s research and development company that focuses on AI, said it aims to improve car safety
by enabling vehicles to anticipate and avoid potential accident situations. Toyota has said the institute will spend $1 billion (Dh3.67 billion) over the next five years, as competition to develop self-driving cars intensifies. Earlier this month, home rival Honda Motor Co said it was setting up a new research body which would focus on artificial intelligence, joining other global automakers which are investing in robotics research, including Ford and Volkswagen AG. “Some of the things that are in car safety, which is a near-term priority, I’m very confident that we will have some advances come out during the next five years,” Pratt told reporters late last week in comments embargoed for Monday. The concept of allowing vehicles to think, act and take some control from drivers to perform evasive manoeuvres forms a key platform of Toyota’s efforts to produce a car which can drive automatically on highways by the 2020 Tokyo Olympics. While currently driver assistance systems largely use image sensors to avoid obstacles including vehicles and pedestrians within the car’s lane, Pratt said TRI was looking at AI solutions to enable “the car to be evasive beyond the one lane”. “The intelligence of the car would figure out a plan for evasive action ... Essentially [it would] be like a guardian angel, pushing on the accelerators, pushing on the steering wheel, pushing on the brake in parallel with you.” As Japanese automakers race against technology companies to develop automated vehicles, they are also grappling with a rapidly greying society, which puts future demand for private vehicle ownership at risk. Pratt said he saw the possibility that Toyota may one day become a maker of robots to help the elderly. Asked of the potential for Toyota to produce robots for use in the home, he said: “That’s part of what we’re exploring at TRI.” Pratt declined to comment on a media report earlier this month that Toyota is in talks with Google’s parent company Alphabet to acquire Boston Dynamics and Schafts, both of which are robotics divisions of the technology company.
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Global Innovation Summit 2016 The Future is Now!
September 21, Atlantis the Palm, Dubai
Deepen your business ties with over 2,000 entrepreneurs & CXOs
5 Star luxury Not your usual expo but 5 star immersive experience
Powerful agenda
Growth opportunities
Event will feature globally acclaimed speakers
Strengthen your business ties with over 2000 highly soughtafter CXOs
Interactive sessions with CXOs Showcase your brand where business happens
Book NOW Call 042659704
www.innovationsummit.ae
AUGUST - SEPTMBER 2016 ┃ Intelligent SME
RETAIL
OMNICHANNEL RETAILING A Friend Or A Foe? Consumers expect brick-and-mortar stores to keep up, offering the same kind of integration in their complete shopping experience. They expect to be able to order items online, have them shipped to their house and return them in the store – a seamless experience between online and brick-and-mortar. 26 www.theintelligentsme.com
AUGUST - SEPTMBER 2016 ┃ Intelligent SME
RETAIL
“T
hat seamless experience which allow you to buy your favourite product, either from a brick & mortar store or an online store, from your store on Meena Bazaar to a Mall at the High Street, from a mobile app to a website…...” You must be OMNI-PRESENT.. “Omni” is a Latin word which means “everywhere”. “Omni Channel” means ensuring your presence is “EVERYWHERE”. When online retailers like Souq, Alshop, Letstango etc. started selling products online, the offline brick & mortar retailers considered it as a threat to their business. In my viewpoint, Souq, Alshop & Letstango were creating market places wherein even a single brick & mortar store could register & sell his products to the world. Never in his life can he imagine his store catering to millions of users across the world. Now, do you call this an Opportunity or a Threat! The call is yours. Consumers expect brick-andmortar stores to keep up, offering the same kind of integration in their complete shopping experience. They expect to be able to order items online, have them shipped to their house and return them in the store – a seamless experience between online and brickand-mortar. Retailers must make sure that they meet these expectations, because if they don’t, shoppers can easily find another store that does. This seamless shopping experience is called omnichannel retailing. Online Market Places & Offline Brick and Mortar Stores are like two sides of the same coin. Their modus operandi is diverse but the aim is the same, “Making more Sales”. Any brand looking at national/ international expansion must consider each and every channel that reaches out to the customer & ensure their significant presence on every channel in every way. In the past, retailers have asked customers for their email address and zip code at the point of sale. However, they have no way of knowing which customers they have already asked, so they ask every customer every time – which can become bothersome. Instead, omnichannel strategies allow customers to enter their own
information at their own will, which they are often more comfortable with. For example, in-store kiosks allow customers to enter their email address rather than giving it to the cashier. Also, online stores and social media pages provide outlets for retailers to collect customer information in a less aggressive way, like simply inviting them to sign up for email alerts. They can choose to give their first and/or last name in addition to their email address, allowing retailers to send personalized emails. In addition to name and email address, retailers can gain insight into what their customers have been shopping for online. With this information, they can make specific offers about customers’ favorite products. For example: “Dear Mrs. Shaikh, We’ve noticed you have been looking for jeans lately. We would like to offer you 30 percent off of your next pair! Enter the promotion code ‘JEANS’ to redeem your exclusive offer.” This provides them with even more motivation to make a purchase. With omnichannel retailing in place, shoppers can make purchases from wherever they please. It gives retailers inventory visibility and availability in the customer’s preferred channel. For customers, shopping is more convenient than ever and for retailers, there are more selling opportunities than ever. Shoppers have a wider selection and multiple means of
accessing that selection. Here are a few examples of how retailers can leverage on omnichannel: Online ordering: For example, a shopper who is stuck up in night shift, can browse her gym shoes and track pants online instead of having to going to the stores on her weekly off. She can order items straight from the store’s website and have them shipped to her house. You can offer style tips and size guides for exceptional online customer service. Encouraged showrooming: Ever found the perfect pair of jeans only to realize there weren’t any left in your size? Omnichannel retailing allows customers to browse items in the store that may be of limited quantity and then shop for additional size and color options online. That way, they can see the item and try it on before purchasing it online. They can either have the item shipped and delivered to their house or shipped to the store for pick up. Retailers could also set up a kiosk, so customers can place an order for their preferred size and color while they are still in the store. Social media sharing: Posting products and gift ideas on your social media profiles allows users to send them to their friends and share them on their own pages. Users can give opinions and recommendations to their friends, allowing word of your products to spread. Offering coupons and deals on your social media profiles will inspire users to visit your online store to redeem their exclusive offer. Omnichannel is a beautiful thing. It allows retailers to get closer to their customers and make customized offers. It allows customers to enjoy the convenience of their preferred channel, a wider selection of items and a wealth of buying opportunities. It blurs the lines between online, brick-and-mortar, smartphones and social media for a seven-star seamless shopping experience.
Dr. Rupal Shah, Director at Your Retail Coach
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Strategy
Whatever happened to five year plans? We must be flexible in our planning in the knowledge that the business environment today will almost certainly be very different from in a couple years. We should embark on business plans with a worst case scenario in mind.
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I personally am not a believer in five year plans
I
recently asked an old colleague and fellow businessman whether he still made use of five year plans. He raised his eyes to the ceiling and said that he’d be lucky if he could cobble together a five week plan! Given the volatile state of affairs in the Middle East there is a tendency for the best strategies to be violently blown off course by major events. Much of my business in the GCC region was mercifully spared the instability of the so-called Arab Spring. However, from mid-2014 oil-prices nose-dived. For GCC economies where the lion’s share of government budgets are based on oil revenues, such a plunge was painful. I am based in Bahrain where the private sector has continued to grow at a steady 3%. However a cashstrapped public sector has knock-on effects. Furthermore, decreasing oil revenues impact business confidence, leading to falling investment and sluggish stock markets. Businesses have moved from a strategy of bullish growth to one of consolidation, where the priority is holding on to long term clients, ticking over and grabbing whatever work is going. A five year strategy written in 2013 would be meaningless today! As the CEO of Promoseven Holdings and a stakeholder in a network of companies across the region; the events of 2011 were particularly disruptive. In the case of Syria and Libya, regional companies simply had to shut up shop and get out, while stomaching whatever losses were incurred - Local businesses lost far more than this. Cairo saw a succession of disruptions resulting from the political volatility. Egypt lies at the heart of the Arab world and is a crucial business centre. Regional companies generally had to hang on, roll with the punches and manage whatever continuity was possible. Even during the worst of the unrest, life goes on, commerce continues and the smart option tends to be holding fast and waiting for things to get better. Long-term planning is tricky in a context where between one day and the next you can find yourself with an entirely new governing system, a brand new constitution and completely different ways of doing
business! However, I don’t believe we simply jettison long term planning and throw our strategies out the window. So what is the solution for a business environment where volatility is likely? We must be flexible in our planning in the knowledge that the business environment today will almost certainly be very different from in a couple years. We should embark on business plans with a worst case scenario in mind. In a favourable environment a major construction project may seem highly lucrative, but have I covered my back if the project is mothballed due to a sharp economic downturn? Could civil conflict reduce the net worth of property to near zero? We should pay careful attention to the costs of primary inputs: The pricing of a particular scheme is currently competitive, but what happens to my margins if the government follows through on subsidy reforms and petrol and utility prices increase? In a regional company we need a clear-sighted idea of what particular offices are worth to us. Should we be doing everything we can to keep an office in Damascus open in the hope that things will improve; or is it wiser to cut our losses? A successful businessman must closely follow political developments and be quick to assess the consequences – not just for risks, but for opportunities: What commercial inroads does liberalization of the telecoms sector offer? What about a new law on food standards, Islamic banking or tighter regulations on alcohol? The oldest law of business is the necessity of turning a challenge into an opportunity and this is certainly true for businesses undergoing economic and political uncertainty. In Bahrain and Saudi Arabia ambitious plans are afoot for diversification away from dependence on oil. In Bahrain, this means huge investment in construction, tourism and infrastructure and efforts to stimulate banking and encourage foreign investors. This means that there are new opportunities for versatile private sector companies which are able to shift their strategies and move sideways into new economic niches. If we know the local market, have
Strategy
motivated employees and a strong reputation it is not so difficult to seize opportunities outside our comfort zones. For some businesses this can be the difference between life and death, as certain commercial doors close and others open. Hardship often brings its own rewards. Companies which stay in the market over a difficult period often enjoy the dividend when the economy regains momentum. Likewise, businesses in difficult circumstances reduce costs and increase efficiencies - making them more competitive and better able to compete in neighbouring markets. In summary; the difficulty of sticking to a five year plan in a challenging economic environment doesn’t mean that we should abandon strategic planning – this is a recipe for stagnation, unfocused decisions and an invitation to being overtaken by leaner and keener competitors. I personally am not a believer in five year plans, but I believe in clear objectives – short term and long term objectives with inbuilt flexibility that can allow for the unexpected. Rather, we should plan for uncertainty, with a clear-sighted view of the risks and possible scenarios; but also constant vigilance for viable avenues for diversification. When my successful advertising business was devoured by the 1975 Lebanese civil war, I arrived penniless in the GCC and applied all the lessons I had learnt to re-establishing myself in a new business environment. A second bite of success was never inevitable but I am a great believer in the value of imagination; tirelessly seeking new opportunities even when they are scarce; while having a long-term vision which one can adjust when the need arises. All our plans may go up in smoke tomorrow; but if we have the hunger to succeed, we simply dust ourselves off and start drawing up new and better plans.
AKRAM MIKNAS, CEO, Promoseven Holdings
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EMPLOY SATISFACTION
GROWTH FEARS:
Aligning business growth with employee satisfaction A risk associated with business progress is employees becoming increasingly disengaged in the workplace due to heavier workloads, pressures, and deadlines. According to the Epicor research, 43% of leaders are concerned that as their business grows, workloads may increase to a level that places too much pressure on staff, prompting key personnel to leave the organisation.
W
hen a business experiences sudden growth, it creates a myriad of emotions from joy and excitement to dread and fear. The progressive mind-set that stimulates growth can inadvertently cause us to be less sensitive to the negative emotions that might emerge as a
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result. Because we are creatures of habit, it is probably not surprising that some of the increased complexity and ambiguity can be quite unsettling. Paradoxically, this emergent fear can start to hinder growth, as leaders pick up on it and start taking preventative measures to avoid damaging customer relations, reducing service quality, and
minimize the mounting pressure on operations. The reality is that progress is part of doing business, and with some careful planning and forward-thinking, the growth period does not have to be ridden with pain. The right IT infrastructure can help to facilitate some of these big changes and make
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EMPLOY SATISFACTION
the process a lot smoother. Recent research conducted by Epicor has explored the different approaches organisations take to growth. It’s been found that the three priorities tend to be in turnover and sales, profits, and expansion into new industries and product areas. The outlook for 2016 is positive; 70% of respondents expect growth in 2016, and 79% have made (or are making) investments in integrated IT infrastructure as a key to supporting growth. But what happens if the growth is unforeseen, or experienced as a surge? Leaders can find themselves on their back foot if they have not developed the appropriate skillset to handle the new changes. Rob Morris, Head of Innovation and Thought Leadership at YSC, the premier global leadership development firm, believes that hiring for and developing the right skillset for growth goes a long way in dealing with the excessive demands placed on the workplace. “Although we plan for growth in linear and rational ways, it often looks more like chaos in practice. When growth happens at such an unpredictable pace and scale, you don’t usually hire for that growth. As a result, you will not have the people resources to deliver on the new scale that you have created for yourself. The downside is people end up doing more than they expected, and often outside of the roles they were hired or trained for.” A growing business can hinder employee satisfaction A risk associated with business progress is employees becoming increasingly disengaged in the workplace due to heavier workloads, pressures, and deadlines. According to the Epicor research, 43% of leaders are concerned that as their business grows, workloads may increase to a level that places too much pressure on staff, prompting key personnel to leave the organisation. Morris believes that a key predictor of job satisfaction is whether employees find ‘meaning’ in their work and warns that an employee’s personal values and missions can become misaligned with the company’s goals once the company starts growing. “If I am asked to do things outside
It is vital to have the right infrastructure in place to support employees during growth. If technology can be used to ease the strain of increased workloads, employees can even find themselves empowered by growth. of the boundaries with which I joined the company, suddenly I may be less committed to it. If employees have less of a connection with the tasks involved or when they take on too many new tasks, too fast then it creates job dissatisfaction.” It is vital to have the right infrastructure in place to support employees during growth. If technology can be used to ease the strain of increased workloads, employees can even find themselves empowered by growth. They may, for example, find themselves working on a wider variety of tasks, working closely with leadership to drive growth, and gaining more access to corporate knowledge if their roles are facilitated by the right technology. How can businesses reduce the ‘pain’ of growth and plan ahead? Any big change in a business – especially a surge in growth - can be disruptive and can filter through the organisation. According to Morris, this collective expression of pain typically manifests as resistance or disengagement. But businesses can get ahead of this curve by planning for any potential problems and ensuring they have enough resources to cater to increasing demands by the workforce[1]. The Epicor survey findings revealed that the top two stimulants for growth are ‘technology leadership’ (40%) and
‘skilled workforce’ (39%). This can be a two-edged sword. Organisations that are stuck with legacy systems might find themselves falling behind, unable to adapt to new business processes, or meet the demands of employees who expect modern technology in order to do their jobs. On the other hand, the organisations that leap onto new technology, will find themselves ahead of their competitors, ready to embrace new challenges. A key facilitator in managing this process smoothly is to make investments in the right technology as the “demand for quick communication and transaction” increases[2]. Many progressive businesses are already doing this – according to the Epicor research 79% of businesses have made or are making investments in integrated IT infrastructure. Increased data visibility, for example through the use of the latest enterprise resource planning (ERP) solutions, can allow businesses to perform in-depth analysis of key KPIs, so that they can manage costings and profitability more confidently. Customer relationships can likewise continue to prosper during the growth period with agile and scalable ERP and manufacturing execution systems (MES) that meet their demands. According to Morris, employees need “emotional support to withstand the pressures of growing.” He also recommends “fostering a robust culture so people can be resilient throughout the growth surge.” It’s clear that this culture can be more robust if people are supported by the technology they need to do their jobs. Although it seems counter-intuitive, e.g., deploying technology in support of an emotional challenge, investment in the right IT infrastructure is therefore essential, and will help maintain the emotional well-being of employees throughout this transitionary period.
Sabby Gill, CEO, executive vice president, Epicor International
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AUGUST - SEPTMBER 2016 ┃ Intelligent SME
E-Commerce
Human-to-Human (H2H) poised to disrupt e-commerce Mohammed Johmani, CEO and Founder of Dubai-based and startup Cary! explains about the opportunities and threats he has been facing with the rise of human-to human business model.
C
ompanies such as AirBnb and Uber have transcended their position in the market by recognizing the incomparable advantages of Ecommerce as their main platform for doing business. Top-down communication and business models would soon be something of the past, with a revolutionized economic system that leaves companies fostering collaboration and utilizing technology to build trust amongst consumers. Start-ups who capitalize on this sharing economy have the chance to drive consumer behavior and encourage people in their market to be more open about trying new and unconventional products and services. The marketplace www.cary.ae established in 2013 and did only offer cars in the beginning, focusing on resellers rather than users. Founder Mohammed Johmani did see new potentials in the market and within his industry that gave him the idea to shift his business towards a more user-friendly, social and human-tohuman model. Can you give example on how Cary! Has adopted human-tohuman? We have many features on our platforms that promote human-to-human collaboration in buying and selling items. Contact information and modes of communication are made available to buyers when they need to speak to the sellers. We also promote a very casual and friendly tone of voice when it comes to our communication with our audience, and leave room for people to feel free when enlisting any items on our platforms.
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E-Commerce How does this impact the customer experience on your platform? Human-to-human is about building a connection, not just trying to make a sale. Creating value-added experiences that saves the customer some money along the way was our new reality. We made sure to implement investment in consumer satisfaction marketing in an effort to drive word of mouth advertising, which we believe is vital. (this is onpoint), we can add the following as well: the way we speak to our audience and how we interact on transactional, promotional, or business levels is very casual, personal, and does not have restrictions when it comes to availability. What challenges and threats do you face as a startup in such a competitive market? It’s a very competitive market with so much development and growth on a day-to-day basis, this creates somewhat of a challenge when it comes to developing and updating our platform and backend with the most up-to-date trends in the market. This on the other hand comes to us as an opportunity, where we have so much to learn from all around us, it gives us more and more ability to grow and stay focused on the important parts of development. Especially seeing as we are a start-up in the market, the more we have to learn from, the better and faster we can succeed. What potentials do you forecast in the next 5 years for your industry and in the market? We live in a fast-changing environment and plans can change overnight, hence many things are in our plans for as soon as a few days from now. The e-commerce industry is with no doubt fast-growing and soaring at an unbelievable pace, this is definitely something we will be taking into our advantage as a start-up with so much to do and so many ideas to build on. We are not only in a fast-changing environment, but also a competitive one, in which we always need to keep updating and refining our users’ experience. That being said, we have
recently launched a new version our both our website and our application that cater better to our users’s needs. This lead to a large increase in the number of users on our platforms as it was highly comprehensive and acquired a strong competitive edge. Those human touches on the other hand are definitely remaining part of the formula. As a startup, where does your business stand today in the journey to become a profitable high-value enterprise? We are a stage in our journey where we have developed an excellent skeleton to our business model. We are keeping it consistent and building at a very fast-pace. Assets are in place, because of which we believe in any moment can result in overnight changes and success. • Our website has the unique advantage of being incredibly user friendly, beautiful uncluttered design, and a backend as solid as can be. Things are looking up with new updates and a large number of users. • We’re looking forward to many updates to come in the very near time that we are sure will give us more of a competitive advantage, turn e-commerce around, and change the way we get things done in this market!
About Cary!
Cary! is a social media mobile app that makes it easy for people to buy and sell used items from people around them. It takes time to search through thousands of sites to find the perfect car, it takes even longer to search for a website that sells more than just cars. That’s why Cary! developed a platform where you can find everything you’re looking for on one site. We believe the process should be as easy and exciting, so we went for a straightforward approach. To create a listing, simply upload items information as well a photo from your phones camera roll. Browse through the list of items by category, year, model, brand, color and much more through the use of our mobile application. For more information about Cary!, please visit: www.cary.ae 33 www.theintelligentsme.com
AUGUST - SEPTMBER 2016 ┃ Intelligent SME
Digital Marketing
TARGETED MARKETING HAS NEVER BEEN EASIER, ESPECIALLY IN SOCIAL NETWORKS GEORGE DEEB, Managing Partner at Chicago-based Red Rocket Ventures explains key marketing strategies that utilise popular social lnetworks.
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AUGUST - SEPTMBER 2016 ┃ Intelligent SME
Digital Marketing
T
he marketing world has substantially evolved over the last few years, in terms of how you can target prospective customers for your business. Before, your primary options for targeting, were largely around demographics or geographies through media buys on larger websites and ad networks, or through keywords through the search engines. But, the major social networks have made some very interesting strides in the last couple years, in terms of letting advertisers drill down like a laser beam on very narrow targets within their broader audience. Below are a few examples of what I am talking about. VIA LINKEDIN If you are a B2B business, looking to target B2B buyers for your product or service, LinkedIn is the place for you, where you have a couple really good options to consider. Let's use a case study, assuming you are selling technology that serves event marketers and you are trying to target heads of event marketing as prospective buyers. The first option is to target your media buy around LinkedIn users that are members of targeted user groups therein. In this example, look at all the groups that serve prospective endbuyers in the event marketing space, and target your ads only to those users. As an example, the 20,000 members of the "Event Marketing Pros" group is probably a pretty good place to start. A second option is to target your media buy around LinkedIn users that have the right business title and work at the right size company you are targeting. In this example, anybody with the title "Event Planner" or "Head of Event Marketing" in their user profile page and work for "Companies in Excess of 1,000 Employees" (if trying to get to Fortune 500 accounts), would be really great to target your ads. VIA FACEBOOK If you are a B2C business, looking to target B2C consumers for your product or service, Facebook is the place for you, where you have some really good options to consider. Let's use a case study, assuming you are selling a new line of line of upscale men's fashion. It has never been easier to steal potential customers from established
Major social networks have made some very interesting strides in the last couple years, in terms of letting advertisers drill down like a laser beam on very narrow targets within their broader audience. brands in your space. Imagine that you can now target yours ads to the Facebook fans of Giorgio Armani, Ralph Lauren or Tommy Hilfiger, or the male fans of logical retailers like Nordstrom or Saks Fifth Avenue. These people are obviously interested in men's fashion, and with the right messaging might be interested in learning about new men's fashion brands. The same holds true for targeting followers of major media outlets in your space. Facebook fans of GQ, in this example, would be pretty ripe fishing grounds for your product. And, it would be a lot cheaper trying to access those users via Facebook's
pay per click model, than paying GQ thousands of dollars for CPM based display ads in their magazine or website. VIA TWITTER And, let's not forget Twitter, whether you are B2B or B2C. You can target your ads to users that have certain desired keywords in their profile description, or in their stream of conversations. Or, again, piggyback on the followers of your key competitors, industry groups or media outlets, to get your messaging in front of those known users that should be really interested in what you have to offer. Anyway, for all you start-ups out there on very limited budgets, or bigger companies trying to drive a higher ROI on your marketing spend, the better you can target your messaging to the right potential buyers, the higher your conversion rate, the lower your cost of acquisition and the higher your ROI will be. And, hopefully, examples like the above show it has never been easier or more affordable to get good levels of targeting into your ad campaigns, on this pay-per-click basis.
GEORGE DEEB, is a Managing Partner at Chicago-based Red Rocket Ventures.
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AUGUST - SEPTMBER 2016 ┃ Intelligent SME
Digital Marketing
SOCIAL INFLUENCE MARKETING boosts YOUR BUSINESS Understanding how social influence marketing works can help companies to provide with information that prospective customers are looking to make a decision, and can also provide positive business outcomes for that organisation. 36 www.theintelligentsme.com
AUGUST - SEPTMBER 2016 ┃ Intelligent SME
Digital Marketing
I
n the current hyper-connected environment where companies and consumers interact, learning how to leverage social influence marketing techniques can be a source of competitive advantage for your business. The Internet is among the top sources of information that consumers use for decision making. We use it to get information about products and services, and we rely on other people experiences on those purchases to assess the fit of a product with our unique needs. Understanding how social influence marketing works can help companies to provide with information that prospective customers are looking to make a decision, and can also provide positive business outcomes for that organisation. Social influence marketing refers to the strategies that are implemented by marketers to change the attitudes, feelings and behaviours of consumers based on the actions of others. Social media has facilitated the use of social influence strategies in online settings, as content can be easily created by users and shared on the web. Why do we let others influence our decision making? The answer to this is rather pragmatic; we are just trying to fill in the gaps. It is impossible to know everything about a product, especially when this is unknown to us. We are faced with several choices when we are trying to fulfil a need. Think of the choice that you make when you are trying to go to find a good sushi restaurant. In general, you can have two options: you can start visiting all the sushi restaurants in the UAE to get firsthand experience of their culinary skills. However, this would take time
existing reviews smartly 2 Use in both online and offline
Social influence marketing refers to the strategies that are implemented by marketers to change the attitudes, feelings and behaviours of consumers based on the actions of others. and a considerable amount of money. This becomes cumbersome, and therefore we find shortcuts to those gap of information. We rely on friends and people that we trust. We rely on ‘experts’ such as food reviewers, and even on the experience of unknown customers through the reading of online reviews. However, how can you use this for your business? Here are three strategies that are easy to implement and that can improve your business outcomes:
online reviews in your 1 Allow website or third party websites
Online reviews are a type of electronic word-of-mouth that is very effective at helping a consumer make a purchase decision. If your site does not have the capability to allow this kind of reviews, adding them and encouraging customers to leave reviews can help your business in the long term. Are you worried about negative reviews? A recent study has found that consumers are untrustworthy of extreme reviews (overly positive and overly negative reviews). Consumers believe that these type of reviews are more likely to be manipulated, namely posted by the owner of an establishment, by competitors, or by overly critical people.
marketing material The effect of the valence of a review (positive or negative) is moderated by the profile of the reviewer. We tend to get influenced more by people that “are like us”. Leveraging on this effect can be done by displaying the reviews that are more relevant to a target audience. For example, if you already know that your primary customer base is of a particular gender or age brackets, then displaying reviews from people within those criteria can strengthen the effects of those reviews. This can also extend to offline marketing communication materials.
your potential customers 3 Let know about the behaviour of
others This is a technique widely used by star e-commerce websites, and that is still unknown for many SMEs. Companies such as EasyJet or Booking.com display how many people purchased a specific product or are even looking at it right now. This creates a sense of urgency to take a decision, but also of validation that the product is worth it since many other people have already bought it. Transferring this into other industry contexts could lead to adding the number of orders of a particular product in the day or month. Alternatively, if your price varies depending on the demand of it, displaying how many people are looking at the product in real time can also improve the conversion rate that you are currently getting.
Dr Rodrigo PerezVega, is a Lecturer in Marketing at Henley Business School. He specialises in digital marketing, social CRM and social media marketing. His research focuses on how to make branded social media presence more engaging for customers.Ventures.
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AUGUST - SEPTMBER 2016 ┃ Intelligent SME
Family Business
Unleash Your Family Business DNA An employee will never feel or think like you about your business, unless they have some "skin in the game,” says Reg Athwal, Chairman of RAW Group and the Founding Partner & MD of RTS Global Partners 38 www.theintelligentsme.com
AUGUST - SEPTMBER 2016 ┃ Intelligent SME
Family Business
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hen you think of the term “family business,” you may initially think of the mom and pop store in your neighborhood—you know, the kind of small business that supports and is run by a single family. You rarely think of large, successful, global organisations. The fact of the matter is that “family businesses” come in all shapes and sizes, from the small convenience store where father orders the merchandise, mother does the books, and the kids run the cash register, to the large corporation that provides income not only to the family members who own or control it, but to thousands of other families as well. Some of these businesses are governed by family members only, while others rely heavily on outside influences. Some family businesses employ a “handson” philosophy, while in others family members merely play an advisory role. My point here is that there is no one “blueprint” that these businesses must follow. That being said, when I refer to “family businesses” in my book, you can assume four things to be true:
1. More than one family member owns or works in the business 2. The business provides income for more than one family member 3. Family members retain control of the business, either by playingprominent roles, or by maintaining voting control 4. There is intent to keep the business within the family Beyond that, each family business is as unique as the family behind it. Distinctions between Family and Non-Family Businesses How are family businesses distinct? One of the biggest differences between family and non-family businesses is that those involved in family
Some family businesses employ a “hands-on” philosophy, while in others family members merely play an advisory role. My point here is that there is no one “blueprint” that these businesses must follow.
businesses have what I like to call more “skin in the game.” Skin in the game is the amount that’s at stake for you personally, depending upon your organisation’s successes or failures. Regardless of where we work or what we do, we all have some degree of skin in the game. To illustrate, let’s compare CEO “A” and CEO “B.” CEO “A” was recently hired at a large computer company, after working up the ranks at several other companies. He knows that his success is directly tied to the success of the company. If the company makes a profit, his compensation is structured so that he benefits in bonuses and incentives. If the company tanks, he could be out of a job. This is certainly incentive enough to do a good job, but when all is said and done CEO “A” is significantly more invested in himself than he is in the company. Chances are he has worked at many companies before this one, and as he climbs the corporate ladder, intends to work at many more. When it comes to growth, he thinks short term. If the company doesn’t do well, he simply moves on. His personal net worth is tied up in his success, not just at this organization, but at every place he works throughout this entire career. CEO “A” is not a family member in a family-run business.
CEO “B” was recently promoted to CEO, after working up the ranks at this one organization. She also knows that her success is directly tied to the success of the company. However, while personal success is important, she is more concerned with the success of the company. As a matter of fact, CEO “B” would go to great lengths, including taking a pay cut or contributing to financing—in order to ensure healthy and sustained growth. Her relationships with her co-workers and colleagues are deeply personal, and she is invested in their success as well as her own. Her commitment to the company is lifelong, and she would never dream of abandoning ship during challenging times. When it comes to growth, she thinks long-term, years and decades, rather than short term. Just like CEO “A,” her personal net worth is tied to the success of the company, but even more inextricably linked are her feelings of accomplishment, self-worth, pride, and accountability. To CEO “B” the organisation she works for means so much more than a paycheck. CEO “B” is a family member in a family-run business. Key Considerations: • Be clear on the involvement you will have IN your business – involvement should not mean micromanagement, let your employees be empowered and so they don't live in fear • Successful family businesses focus on professionalising the business – think how can you shift from being IN the business to being ON the business • Remember an employee will never feel or think like you about your business, unless they have some "skin in the game.”
Reg Athwal is the Chairman of RAW Group and the Founding Partner & MD of RTS Global Partners, the leading family business advisory firm in Africa, Middle East and Asia with 50+ members in 8 countries, with offices in Dubai-UAE and Nairobi-Kenya.
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AUGUST - SEPTMBER 2016 ┃ Intelligent SME
Family Business
Family Managed Busineses in MENA region A
While for nonFMBs, the criteria is immediate shareholder value, for FMBs more important is long term value creation and continuity. In non-FMBs there are silos in operations and the managers aim for local optimization often at the cost of overall interest of the company. On the other hand, FMBs focus more on holistic perspectives. 40 www.theintelligentsme.com
t times, some Family Managed Businesses (FMBs) hesitate to acknowledge that they are so. It seems that to be an FMB is opposed to be a well run company. They would prefer to present themselves as a professionally run company as if FMBs can't be professionally run. There are wide spread and oft repeated notions that FMBs are very small companies, managed without any systems, as a fiefdom of the owner and are short lived. Perhaps it is because of these notions that it is unfashionable to be identified as FMB. What is missed out is that it is the FMBs that generally outperform their non-family counterparts. Prof. John Ward, who has been researching on family businesses for nearly three decades suggests that there are a number of reasons for the outperformance of FMBs. High level of commitment The FMBs have their family's name and wealth at stake and as such they provide a 24*7 vigilant ownership. Since the business is identified with the family, they have a high level of commitment, dedication and perseverance. Their visible presence in the business leads higher productivity. Their comparatively easy accessibility to the employee promotes higher sense of belonging leading to higher job satisfaction to the employees. They do not have to chase quarterly results and have a long term perspective and as such they can focus
on quality of products and services. They can invest time and money in building customer confidence and developing business. They are personally invested in the business and so have high level of adaptability to the available opportunities. The decision making is fast and free from bureaucracy. They demonstrate high amount of prudence and have extremely efficient cost controls. They have not only economical assets but also emotional assets. They have the biggest advantage of long continuity in leadership. The average span of CEO in non-family firm is of 4 to 4.5 years in US, it is 15 years in case of FMBs. This gives them long memory providing continuity to the business. Long-term value Creation While for non-FMBs, the criteria is immediate shareholder value, for FMBs more important is long term value creation and continuity. In non-FMBs there are silos in operations and the managers aim for local optimization often at the cost of overall interest of the company. On the other hand, FMBs focus more on holistic perspectives. One of the biggest challenges of the businesses today is that of increasingly complexity. It has to manage objectives which are diagonally opposed to each other. Thus they have to ensure high quality and at the same time cost control. They have to ensure employee satisfaction and at the same time high performance demand. Managing such contradictions is a big challenge
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XXXX
for all businesses. As far as FMBs are concerned by the very nature they have been managing contradictions all along. They had to manage equality among family members on one hand and fairness on the other. They had to accommodate individuality and at the same time build conformity. They have to ensure liquidity and at the same time provide for growth. Regularly managing such contradictions, it becomes easier for the FMBs to manage the challenges of other business contradictions. The major difference in management between FMBs and nonFMBs is the orientation of time. The non-FMBs are more focused on today and have targets to achieve. The FMBs are likely to be more concerned about the past and the future. As a consequence, the non-FMBs are more performance driven and the FMBs are more value driven. They do have only the profit objective but have the concurrent objective to have harmony in the family and protecting the long established name of the family business.
FMBs – Lessons for the west There are serious misconceptions about the succession issues in FMBs. It is being projected that often the seniors do not want to 'let go' and often the next generation either do not have inclination or competence to take over the charge. This may be true in western world but generally in MENA region the situation is quite different. Here, in FMBs, the son or daughter is getting educated as well as inducted in the business from quite young age at the dinner table. They know the family history and they feel responsible for contributing to the family history. The previous generation knows well that the transition is going to take place and try to the best extent possible to groom the next generation. In any case it is generally more than two decades that the two generations work together. In the process the transfer of tacit knowledge takes place and the inductee gets groomed for the business. As a result the succession over the years becomes a natural flow. A lot of literature is written in the west, largely criticizing FMBs about
their short life and about problems of succession. While we in MENA and Asia have to learn a lot from the west, as far as the family matter goes, it is the west which has to learn from us. We have a rich tradition of family and we have extremely strong family relations and bond. Our family businesses have been doing great and continue to do great. While the name of very big groups like Savola Group of Saudi Arabia or Majid Al Futtain Group of UAE strikes the cord immediately, there are thousands of family businesses as Small and Medium Enterprises which are doing phenomenally well.
Prof. Parimal Merchant is the Director with S P Jain School of Global Management incharge of the Global FMB – a distinctive 12 month management program for sons and daughters of business families.
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AUGUST - SEPTMBER 2016 ┃ Intelligent SME
Startup
It is a new dawn for readers, authors and publishers Middle East's first Publish On Demand Service has been introduced by online bookstore Jamalon and CEO Ala’ Alsallal.
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Startup
B
y tackling many of the issues connected with traditional offset printing, such as long delivery times, warehousing and storage costs, expensive crossborder distribution and missed opportunities with out-of-stock books, POD offering aims to revolutionize the regional publishing market. In addition, the expense of offset printing and the need to print larger runs in advance has often meant that authors struggle to find a publisher to print their work. “Our Publish-on-Demand service will take the MENA publishing industry to the next level and will be a vital asset for every regional publisher,” says CEO Ala’Alsallal. Jamalon was founded by Alsallal in his native Jordan in October 2010, and now has a presence in London, Amman, Beirut and Dubai. Through the online website www.jamalon.com, his mission is to expand the region’s access to knowledge and opportunities for learning, and to combat the high illiteracy rates recorded across the Middle East. Today, the company has grown to become the largest online book retailer in the Middle East, delivering 10 million Arabic and English titles worldwide, and having forged relationships with Arabic and English publishers. “As a company that believes in breaking down barriers for the exchange of knowledge between individuals, our POD initiative marks an exciting new chapter for us.” To meet the request of President His Highness Sheikh Khalifa bin Zayed Al Nahyan, who declared 2016 a ‘Year of Reading’, Jamalon, the Middle East’s very own ‘Amazon’ announced its new pioneering Publish-on-Demand (POD) service at this years Abu Dhabi International Book Fair. Set to launch in Dubai this May, new Dubai-based printing facilities will serve as a hub for the MENA publishing industry. By harnessing the latest digital print technology, the POD service will enable the region’s publishers to depend on the Jamalon platform to produce and distribute their printed books all over the world. The POD service prints smaller runs than traditional offset printing, enabling publishers to print as low as just one copy of any book, lowering costs and giving publishers the ability to print
in response to orders. As orders are printed locally, international shipping costs are eradicated, which further reduces print costs. Publishers from all over the world can take advantage of Jamalon’s POD, using the distribution network to make their books available across the MENA region. Unlike other major online book retailers, Jamalon has adapted its strategy to suit the unique needs of the region. The catalogue includes a diverse selection of Arabic and English titles, many of which have not been previously available via e-commerce sites. The website also offers local currencies and bilingual Arabic and English support and thanks to a strategic distribution partnership with Aramaex, payment via local currencies
and the option of cash on delivery is an option. “Jamalon’s introduction of Publish-on-Demand will revolutionize the publishing industry in the Arab world, and will democratize the book industry in the region,” says Fadi Ghandour, Founder of Aramex and Executive Chairman of Wamda Capital.
Jamalon CEO Ala’ Alsallal
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AUGUST - SEPTMBER 2016 ┃ Intelligent SME
Digital marketing
9 Ingredients of a Successful Digital Marketing Strategy for SMEs in the Middle East After 8 years working in the UK digital marketing industry I was really keen to see how things differ in the Middle East, a region with one of the fastest growing economies where digital uptake should be strong, says Col Skinner.
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n September 2015 I was privileged enough to be invited over to Dubai to work with, train and support several businesses, all based under the same family owned business group. The UAE, for example, now has the 2nd highest internet usage with 96% of the population online (according to We Are Social study in Jan 2016). 9 months later and having worked with several Middle Eastern businesses, agencies and developers, I feel that I have discovered a range of areas where they typically fall short. Below are nine must have ingredients that will help make the difference between failure and successful digital marketing strategy in the Middle East.
1.
Set Practical Goals / KPI’s for Your Business Understanding what worked and what didn’t is a key part of the process.
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Going into a marketing strategy or campaign with no aim is only going to leave you coming out with no measure of its success. On the other side of the coin there is the setting of unrealistic goals which can be just as counterproductive. KPI is Key Performance Indicator. A statistics or figure that dictates a campaign has been a success. If you have an agency working for you then this will be something for them to aim for. Goals can be engagement based where you are looking to achieve a certain level
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Digital marketing
of engaged user. Or they can and often are sales or lead based. Some examples of goals or KPI’s may include: • Site bounce rate below 30% • Site conversion rate of 15% • Channel conversion rate above 10% • Time on site above 2 minutes • Paid media traffic to exceed 40% of overall traffic • Contact form completion rate above 5% • 25 phone calls through the campaign (using call tracking software)
• ROI of 100% (investment divided by profit) • Cost Per Acquisition below AED 24 (Note that these figures will vastly vary for different types of business so ensure you put the research in to find realistic figures to aim for.)
2. Understand Your Audience
Crafting a plan to get in front of your audience is going to be very difficult if you don’t know who it is you are actually marketing to. Market
research is no longer reserved for big businesses. Market research helps you get to know your market, follow relevant trends and determine strategic priorities for your brand. This can ultimately save thousands of dollars and days/months developing products or services that fail. You may want to use some of the following examples to build a profile of your ideal customer: • Keyword research – look into how people search and the terminology they use.
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Digital marketing
• Website analytics – Use Google Analytics to understand how users currently interact with your website and any live advertising • PPC based research – this will help you learn more about the terminology used. • Existing buyer data – audit any buyer data you may have collected from email marketing or offline marketing campaigns. • A/B testing – Use testing to understand what works and what doesn’t across many online elements.
3. Craft a Compelling Value
Proposition A piece of research in Canada by Microsoft tested the attention span of 2000 users and found that the average human attention span has fallen from 12 seconds in 2000 to just 8 seconds in today’s smart phone filled world. You now have just 8 seconds online to communicate why your ideal target audience should do business with your brand. Everyone goes on about how their products are the best and their customer service is great etc etc. Users are blind to these kinds of typical unproven sales messages. Think about those things that truly make you stand out from the competition. Those unique selling points that will quickly convince a user that you are the brand to go with.
4. Establish What’s Needed To Succeed Whether your plans are starting small or you have a complex mutlichannel strategy, there will be a certain amount of resource and assets required before it can start. Here are some examples of things you may require to fulfil a marketing strategy: • An Organisational Process, • A Marketing Strategy & Priorities, • Copywriters or Content Creators, • Competitor Data & Research, • Tracking Methods, • Customer Insights, • Stakeholder Buy In, • Internal Staff With Relevant Experience, • Support From Key Internal Staff, • Support From External Partners (e.g. Facebook, Adwords, Agency X etc)
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5. Perfect Your Call to Action
A Call To Action (also known as CTA) is essentially a message that convinces the user or potential customer to take a specific action that benefits your business. Common examples could include: • Call Us Today • Request • Talk To Us • Download Our Whitepaper
6. Carry Out Competitor
Analysis How can you be better than the competition if you don’t benchmark
who they are and what they are currently doing to market to your audience? Before you plan your tactics, advertising channels and advert messaging, ensure you research those movers and shakers in your market/ industry. If you are an international business then this process could be a little trickier but still needs done. Questions to ask during the analysis process include: • How actively are they using social media and for what purpose? • Investigate their customer acquisition approach • What is their unique value
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Digital marketing
downturn.
7. Identify The Business Impact
Determining the impact that carrying out a strategy is going to have on your firm is an important step in ensuring the least barriers or hurdles during its implementation. So
For example these might be:
• Prospecting - Generate fostering leads for follow-up by sales and marketing teams. • Sales - Help your fund raising or sign up team to close sales more effectively. • Marketing - Generate interest in your charity and services. • PR - Build and repair public opinion about foster carers and caring for children. • Community - Develop friends and fans that interact socially with St Christopher's. • Customer Support - Help carers and kids get the most from your services and support.
8. Test, Test & Test Again
proposition? • What kind of convincers and calls to action are they using? • Where do they operate? Local? Online Only? Both? • How good is their customer acquisition strategy? • Are they doing content marketing and is it producing results? The answers to the above will give you a firm grasp of where you sit and what work you have to do to compete in your market. Then it is a case of applying that information to formulate an action plan / strategy.
Many Middle Eastern businesses often trial a new digital marketing platform, medium, advertising etc. and very quickly decide if it works or doesn’t. The benefit of digital marketing is that you can instantly amend things for immediate gratification. A/B testing is a fantastic method for figuring out the best online promotional and marketing strategies for brands. It can be used to test everything from website copy to sales emails to PPC ads. Well-planned A/B testing can make a huge difference in the effectiveness of your marketing campaigns. Here is a range of areas you can implement testing: • Colours, Images, and Backgrounds • Value Proposition • Website Calls to Action • Various Ad Messaging • Different Ad Platforms • Different Landing Pages • Alternative Media Formats • Diverse Online Offers & Deals Within your strategy, factor in how and what you are going to test during the campaign period. Then ensure you always track and record any testing to understand the repercussions of your changes. This way you’ll know what had a positive effect and what caused a
9. Track Your Performance Analytics and tracking should be a part of any strategy. How can you understand the success of your digital campaigns without tracking and attributing data? Accurate data is the first step to making smarter business decisions, reducing costs, and learning more about the products and solutions you sell on your site. This insightful data can help you change aspects of a campaign when certain elements aren't working, ensuring future success and boosting eventual ROI. Google Analytics is the industry standard tool for tracking visitor behaviour to your website. It is very easy to install and is also completely FREE. So there is excuse not to have it installed on your website and advertising campaigns. I recommend paying particular close attention to the following statistics in Google Analytics: • Time On Site • Bounce Rate • % New Visits • Pages Per Session • Conversion Rate • Referral Traffic • Organic Keywords Bringing It All Together In 2015 I did a survey of 55 startups to better understand the digital marketing issues and hurdles they face. The survey results found that a massive 71% of startups do not have a documented digital strategy. Don’t fall into that habit of planning and executing a digital marketing strategy without documenting it all first. This is important for any size of brand and helps everyone in the team understand what the digital marketing is there to achieve, how it’s going to be achieved and lastly how it’s going to be tracked and assessed. Col Skinner founder and Digital Consultant at PROFOUNDRY, a UKbased digital marketing consultancy that works with startups, SMEs and brands around the world, offering strategic digital services that increase ROI for their respective enterprises.
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S U C C E S S I S A D E S T I N AT I O N
H AV E YO U A R R I V E D ?
WATCHES YACHTS DESIGNER JEWELLERY BOUTIQUE REAL ESTATE GADGETS EXOTIC DESTINATIONS FINE DINING
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RARE & FABULOUS
ETSMARTER LAUNCHES “CREATE YOUR OWN JETSHUTTLE” JetSmarter, the world’s largest mobile marketplace for private jets has just launched the “Create Your Own JetShuttle” service for members in the GCC region. The leading private jet company that brings private flying to members’ fingertips, is now offering its members the luxury to essentially create their own charter flight between cities where existing shuttle flights are available. Through JetSmarter’s JetShuttle service, members can either book a seat on an already scheduled flight or, if the specific route and time preferred is unavailable, members can now create their own shuttle directly within in the app. To create a charter flight, members have to purchase a minimum number of seats, which differs depending on the route and dates selected. Once the charter flight is created, it is then opened up in the Shuttle section of the app for other members to book remaining seats, making it a shared charter flight, which increases the number of available shuttles in the region. Currently, the option to create a JetShuttle is available for routes from Dubai, Kuwait, Riyadh and Jeddah.
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RARE & FABULOUS
BREITLING INTRODUCES THE AVENGER II SEAWOLF BLACKSTEEL Avenger II Seawolf Blacksteel is now available in a 1,000-piece limited series 50 models reserved for Middle East customers Water-resistant to a depth of 3,000m (10,000 ft.) (Middle East, 13th July 2016) Swiss luxury watchmaker and aviation chronograph specialist, Breitling has launched the Avenger II Seawolf Blacksteel in the Middle East. Waterresistant to the depth of 3,000m (10,000 ft.), the bold diving watch combines performance and exclusivity in a 1,000-piece limited series, with just 50 models available for the Middle East market.
SAINT HONORE CHARISMA – EXCLUSIVE PERFECTION! The latest timepiece by SAINT HONORE – Charisma – enchants and intrigues in equal measure. Its unusual shape takes you by surprise, its aesthetic charm arresting the eye with an assertively innovative look that allies simplicity and elegance. With this new creation, SAINT HONORE affirms its taste for pure, pared-down designs, contriving two arching forms that embrace the contours of the round 35 mm case, thus connecting it to its strap or bracelet with the utmost finesse. Almost ethereal in quality, the clasps go one step further in accentuating the case’s delicate, feminine curves. The watch comes in two versions, one combining lacquered and sunray satin finishes, the other the opalescent allure of mother-of-pearl and the radiance of diamonds. The latter also has an “Éclair Effect™” finish, an exclusive innovation by SAINT HONORE. Further details perfect the charm of the piece: the black onyx cabochon enhancing the crown and the centre of the dial echoing the lines of the case
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BUSINESS BANKING
Help beat the heat with A/C vests this summer Given the challenging summer conditions in the UAE, we have helped laborers by distributing 500 A/C cooling vests at the Al Manar mall extension construction site, managed by Sun Engineering & Contracting. The specially made vests are designed to reduce the wearer’s body temperature by 5 to 7 degrees for up to 8 hours. They are made of submersible material which need to be submerged in cold water for 5 to 10 minutes. Once the laborers put them on, they start to feel the cooling effect of the vest within minutes. To learn more, visit our YouTube channel. Together, we can beat the heat. For further information on this initiative, please contact us at BusinessBanking@EmiratesNBD.com
600 54 0009 |
emiratesnbd.com |