Architect in telecom - Intelligent SME

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December 2012 - January 2013 Intelligent SME SME Development A positive change for entrepreneurs Zia Hassan, co-founder of Entrepreneurs of Arabia, is an entrepreneur himself. Having worked as a consultant for SAP over the last 10 years, he finally decided to give up a secure, comfortable full-time job in order to give back to the entrepreneurial community. An ISME report. An MBA holder from Cass Business School London, Zia Hassan set up Entrepreneurs of Arabia along with his MBA classmate and friend Tariq Al Najjar in 2011. His first experience of working with young entrepreneurs was in his previous company where he led an initiative to bring young Arab nationals into the private sector. With a burning desire to do more to bring about entrepreneurship and create jobs for young people, Zia came to the Middle East and set about facilitating entrepreneurs with mentors and investors. Entrepreneurs of Arabia connects entrepreneurs with investors and mentors and advises on business ideas/plans. ISME recently spoke to Zia Hassan. Below is an excerpt of the discussion. ISME: How has the platform of Entrepreneurs of Arabia evolved? ZH: Getting the business off the ground has been pretty straight forward as the case for Entrepreneurship and Youth employment has been top of every country’s agenda here in the Middle East. In the beginning, planning and setting up the business was straightforward because there is no need to convince young people to take up entrepreneurship. Even the government has focused on innovation and private ownership in order to create more jobs. During last few months as the business and time has evolved, it has become evidently clear that business plans also require an evolution. Due to dynamic and rapid changes across the MENA region and the UAE, business plans are also evolving due to maturity changes in the financial, legal and commercial spheres. This ultimately means that entrepreneurs need a leaner and more flexible business plan / idea to keep pace with changes in the business climate. However, in my experience, business plans keep changing. This could be due to market trends, changes in financial conditions or legal climate. Therefore, a business plan might seem out of date after six months. Our platform has also evolved- we now offer a number of services. We’ve seen there is a need to help young entrepreneurs with their business plans by telling them how to pitch their idea. A lot of banks are rejecting loan applications, as proposals are not clear enough. Many entrepreneurs get bogged down by the finer details 28
December 2012 - January 2013 Intelligent SME SME Development in their business plans. If one can’t communicate an idea in a manner that indicates commercial viability, then there’s no point making a business plan. So, over the years, we have introduced additional services for these areas to help entrepreneurs. We’re also now in a partnership with Dubai Silicon Oasis Authority and Dubai University. According to our agreement, we will provide high-quality entrepreneurs to the incubation centres of these institutions. They will be screened and filtered rigorously by us. The entrepreneurs in turn will receive incubation services. ISME: How do you ensure that entrepreneurs are not disappointed? ZH: We get numerous ideas on a daily basis. We try not to discourage an entrepreneur’s spirit. If the idea is not good, we advocate a variation of an original idea to see that it is commercially and economically viable. We don’t de-motivate entrepreneurs because they need that spark, and we don’t want to kill that. Ideas are wide ranging - from food to technology, but mostly conventional ideas. Most ideas are localised, they conform to local aspects. We help anybody who has a genuine and great idea. We don’t have a criterion to judge, and we only request entrepreneurs to come with an idea that is thoroughly thought out. We screen investors and entrepreneurs to ensure they are fit to execute their ideas. Then we register them onto our platform. Most often, we ask entrepreneurs if they have a partner involved in their ideas or business plans. This is the first indication that they have thought this through and aren’t wasting their time. ISME: How do you differentiate Entrepreneurs of Arabia from other such organisations? ZH: We differentiate ourselves from other organisations by providing support as well as advisory. The platform is quite unique, because it has all the components of the ecosystem. We’ve got the organisations, the investors, the entrepreneurs, and the mentors, and that’s where we’re unique. We’re trying to offer a faster process to introduce an entrepreneur to an investor. Business cycles are normally longer in this region and, so, by providing a shorter time to market for an idea, we aim to support and contribute towards accelerated economic growth. We are developing a network of independent domain experts on the platform. They have volunteered onto this platform, and they provide consultancy to entrepreneurs. If they are interested in the business they are invited to take a stake in it as well. Our operations are spread over the Middle East. Our domain experts currently are mainly in Dubai. Our plan is to roll out operations across the region with the UAE being the first due its vibrant infrastructure and talent pool. ISME: How much do you charge entrepreneurs? ZH: We don’t charge entrepreneurs any fees because we realise that they are starting off, and money is very hard to come by. Therefore, our business model is not to charge entrepreneurs. Our charges come in when we are successful in a transaction that introduces an entrepreneur with an interested investor. It is a nominal fee, anything from two per cent to 10 per cent for an investor, and we take a stake in an entrepreneur’s business after it has secured funding. ISME: How do you protect the business model? ZH: Sensitivity and protection of intellectual properties are core to our business. Protecting people’s ideas and investor’s credentials is also very important. We’ve embedded it in the platform in each process. For instance, when an entrepreneur registers, we don’t immediately give total access. We interview them, screen them. This sort of example is applicable in whatever we do. Our non-disclosure agreement We’re trying to offer a faster process to introduce an entrepreneur to an investor. tells entrepreneurs not to disclose what we tell them. In turn we ask entrepreneurs to send us their own non-disclosure agreements to protect them. ISME: Do you handle financial transactions between investors and entrepreneurs? ZH: The minimum investment entrepreneurs seek is US$50,000 from an investor. Once an idea has gone through the necessary approvals, we hand it over to an investor who has the regulatory approvals to handle finance. Investors have their own terms and legal framework. We don’t execute the legal framework around an investment ourselves (although we stay involved throughout the entire cycle). We are merely facilitators who see that an entrepreneur receives what he/she wants, and we see it through to the end. If we take a stake in a business, we work with the promoter throughout, providing support and seeing that they grow. ISME: What is your sense of investor confidence here? ZH: Without marketing and just an online presence we’ve received about 100 clients. Investor confidence is high, especially from the government side, which is keen to see young people grow. We also have established businesses coming to us for support. As these companies have a proven track record, it is easier to receive funding. 29
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