How the UAE is attracting talent VALUE MINING
On nov 1, 2016, this column had introduced the concept of HI-TRAC. The abbreviation for the pillars on which the UAE is building its tech startup ecosystem: Happiness Index, Infrastructure, Talent, Regulations, Access and Capital.
Today’s article touches on how the UAE is attracting talent. It’s about how a couple based in Saudi Arabia decided to move to the UAE to pursue their dreams. What’s more, one is from France, the other from Singapore and they came to the region via Los Angeles.
But first some basics that will be of value to entrepreneurs. On the surface of it, the corporate and startup worlds appear to be quite different. Certainty versus uncertainty, process versus innovation. A deeper dive changes the perception. Businesses are about profits. Very simply, three logical statements summarise the basics — Businesses exist to make money. Products exist to enable businesses to make money. Exchanging a product in its market in return for value is what actually brings in the money.
Step one is to build a product or develop a service that can be commercialised. To do this, using a framework helps. For example, the Business Model Canvas, Lean Canvas and the Base Board are all frameworks that can be used to develop a high-level business plan. These tools give the entrepreneur an almost unfair advantage versus people with years of corporate experience. It achieves this by logically framing the key aspects that the entrepreneur needs to watch out for. In fact, corporations such as Ericsson, Deloitte, Telenor and 3M were amongst the first to use the Business Model Canvas developed by Alexander Osterwalder under guidance from his Professor, Yves Pigneur circa 2004. This article borrows from their work.
Technopreneurs usually talk about great product ideas. This is something to watch out for. Technology on its own may be very attractive to technologists but they often forget that money comes from the real world — the market and its segments exchange money for value. Angel investors and VCs provide finance, not revenue. Any entrepreneur setting up to sell out at the right price focuses away from what creates value. The Business Model Canvas asks entrepreneurs to first identify which customer segments they wish to play in. Do those segments have enough revenue opportunity in them? Is there an identifiable problem or value addition opportunity? This is usually the hardest part.
Sharene Lee, co-founder of Melltoo along with her husband Morrad Irsane, has these insights about the value of understanding the customer segments first and then developing the product value proposition.
“We looked at residents of the UAE who want to buy/sell secondhand items without having to deal with scams and meetups. These people cannot or do not want to field phone calls and meet up with strangers, they also prefer to deal with a trusted party and trade in a regulated environment. Usually, these are people who have made UAE their home and want to be part of the larger UAE community. We do not serve the segment of people who want to dump their stuff or people who are transitory.
“To do this, we developed a proposition where, unlike a listing service, Melltoo is an active participant in each transaction, playing the role of the middleman to protect both sides from fraud. In addition, Melltoo handles payment and delivery, thereby facilitating long-distance transactions. When we did this we discovered new segments that found our service super useful. For example, students who had no transport of their own; micropreneurs who needed an online trading platform.”
As Sharene has described, understanding the Customer Segments and building a Value Proposition based on trust is critical to Melltoo’s growing success. Melltoo’s co-founders decided early on that the most effective Channel would be based on mobile-app technology. The network effect and therefore scalability is key to the P2P market place that Melltoo has created.
Melltoo has a licence from the Dubai Silicon Oasis (DSO). Investments have flowed in from the DSO as well as from Turn 8. They are also associated with the incubator in5. They live in Ras Al Khaimah.
In subsequent articles, the Business Model Canvas will be more fully explored and related to UAE’s HI-TRAC ecosystem.