WHAT MENA STAR­TUPS NEED TO GO GLOBAL

An In­ter­view with Haitham Saab, Man­ag­ing Di­rec­tor at Tech­ge­nies Middle East

Arabnet - The Quarterly - - Entrepreneurship - By Alexis Bagh­dadi | @Guer­rillawriter

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.

Haitham Saab, Man­ag­ing Di­rec­tor at Tech­ge­nies Middle East

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