WHAT MENA STARTUPS NEED TO GO GLOBAL
An Interview with Haitham Saab, Managing Director at Techgenies Middle East
Software and mobile solutions developer Techgenies has been around for 10 years - this may be old in startup years, but its spirit is as young as ever. Based in Houston, Texas, it is the brainchild of veteran serial entrepreneur Maan Hamdan. Its team of technology professionals - "Genies" - write new software or customize existing software for a global network of clients. The company has recently opened a new office in Mexico, from which it will offer its software and mobile solutions development services to serve businesses there as well as in the emerging markets of Central and South America.
The Techgenies story began in 2006 when Hamdan established it as a software service provider to support Hrsmart, a talent management software technology and services company he had founded in 1999. As the partnership expanded, so did its resources. During its first year of operations, the company grew to 20 employees, and within 3 years, that number had more than doubled. In February 2015, Hamdan sold Hrsmart (which served over 32 countries) to Deltek for an undisclosed amount, and Techgenies continued its journey. In addition to its recent Mexican venture, the company has software factories in the Philippines, India, and the Middle East, as well as in Canada.
Haitham Saab, Managing Director at Techgenies Middle East, shared with us what it took for this MENA startup to go global:
In your opinion, what does a startup in the Middle East need to go global? At what point of its life should the founders/ceos consider this step? Business planning is key to the success of any business. Entrepreneurs will then need the right partners who are able to contribute funding and guidance in the early stages. Furthermore, I believe that selecting the right leadership team is key. Founders/ CEOS need to understand that they can multiply their efforts by delegating. As the business starts gaining momentum, scalability becomes a key focus area.
Choosing to go global depends on the nature of the company. Some businesses may never need to go global, while others would only succeed if their market was global in nature. Global expansion should be explored and evaluated during the early stages and while building the initial business plan. Deciding when to actually start expanding beyond the original market depends on the product readiness, the company readiness (systems, team, understanding, etc.) and on the global competitiveness of the product or service. In other words, you need to be capable of creating and leading an entry strategy for new markets, which would require local knowledge, serious research, and a SWOT analysis of these markets.
Having a great product is not enough for a startup to succeed. It should be scalable. How would you define scalability? Scalability for us is the ability of the company to grow and meet increased demand on its resources, while maintaining high quality performance, and remaining profitable. Every startup needs to understand which parts of their business will feel the most pressure once the company starts expanding, and make sure they are prepared to meet those demands. In the case of Techgenies, scalability is dependent on many factors: our processes, procedures, systems, recruiting, and training. We rethought our processes and procedures many times over as we experienced growth to continue providing clients with quality service and stay profitable. Another important factor is the right system of software and hosting infrastructure. Lastly, the recruiting and training processes are very important to ensure the availability of the right talent as client demand increases.
Tell us about Techgenies' growth journey. Early on, our scope expanded to include professional services, in the form of implementation of the Hrsmart solutions for clients in the Middle East and Europe, then globally. In order to diversify its client base and expand, Techgenies created a new structure to extend its offerings to other global clients, and created sales offices in the US and Canada, as well as software and support locations in other countries. Today, we are known as a global development company with wide knowledge and experience in delivering software solutions, mobile application development, quality assurance, and professional services to a wide range of verticals and industries. Initially, the founders injected sufficient capital in the company to enable it to grow its revenue fast and become self-sustainable in its first year of operation. Our revenues have historically grown at the rate of 20% annually, and exceeded 30% in 2015. Our recent fast growth and expansion to newer markets, however, is putting more demands on the company's cash flow. The founders are currently providing the needed funding, but we are considering exploring an expanded investor base.
What would you say was the main growth driver for you? Our “Genies” jointly have over 400 man-years of combined experience in Enterprise Software Development. They work either alongside clients’ staff, or remotely from the home office. At the beginning, our aim was to support one of our strategic global clients Hrsmart by providing programmers to help write the company's Cloud-based software. As the partnership evolved, the Lebanon team proved to be so successful and resourceful that Hrsmart selected it to take global leadership in software development, quality assurance, and professional services. The team was eventually contributing effectively in building the core application, supporting global clients, as well as training and managing Hrsmart’s teams at several overseas locations. Partnering with our people has also made a huge difference for us.
What were the challenges that you faced? How did you overcome them? The biggest challenge we faced was finding the right skill set of employees that are qualified, fit our culture, and are able to take us to the next level. The demand for technology resources is increasing globally, and the number of potential candidates that are highly skilled and able to support this demand is limited. The universities in Lebanon have not kept up with the fast pace of technology evolution, and graduates are not well equipped to meet the demands of today's businesses without significant training.
Because the market supply of skilled talent is not strong, we had to invest in training and developing resources to meet our clients' needs over time. We built, trained, and invested in a great team, and they built our business and helped us grow and succeed. We have been able to retain and grow with our key employees since 2007! Although we have had a relatively low employee turnover rate, over the years we hired and trained hundreds of employees, and most of them are now in leading positions with companies in Lebanon and the region. Being creative in recruiting, working with partners, and introducing an employee referral program helped us in the talent acquisition process as well.
What are the future plans for Techgenies? Our business is running well in the Americas, so we are targeting the MENA region and Europe in 2016. Our short-term plan is to increase our market share in our industry reasonably this year, and to add at least a hundred employees to our team by next year. On the long term, Techgenies will continue its growth and investment in the Lebanese digital ecosystem and knowledge economy, and will keep helping startups build their products and services. We are taking part in some acceleration programs happening in March 2016, and we will be representing Techgenies in Montreal and Paris at major business development events to bring new projects to our team in Beirut.