x Abu Dhabi, UAETuesday 25 July 2017

Young entrepreneurs close the deal in local competition

Future leaders put their business acumen to the test, with a modelling school winning the second Big Start, run by the venture capital firm Al Tamimi Investments.

Stefanie Ost, left, won this year's Big Start student entrepreneur competition, which is sponsored by Al Tamimi Investments. Jaimish Damani was named the runner-up during a recent ceremony in Dubai.
Stefanie Ost, left, won this year's Big Start student entrepreneur competition, which is sponsored by Al Tamimi Investments. Jaimish Damani was named the runner-up during a recent ceremony in Dubai.

It's not easy pitching your business idea in the real-life Dragons' Den, as dozens of budding entrepreneurs from the UAE discovered earlier this year.

A local venture-capital firm last month announced the winner of its Big Start contest, in which students from universities across the country submitted business proposals in the hope of making their ideas a reality.

Like the Dragons' Den television show, the participants were invited to pitch their ideas to a panel of investment experts as they competed for financial investment of about Dh2 million to give their business a kickstart.

But unlike the TV show, the Big Start had more of a focus on nurturing entrepreneurial talent, rather than giving a full taste of the cutthroat world of venture capital.

The "dragon" in question was Essam Al Tamimi, the chairman of Al Tamimi Investments, the venture-capital firm that organises the annual Big Start contest.

The second Big Start was launched last September and Al Tamimi experts visited universities across the UAE to promote it. The contest attracted 71 business plans from students of 30 nationalities across 40 universities.

Mr Al Tamimi chose Stefanie Ost as the winner of the contest. The company will now pump about Dh2m into launching Ms Ost's SO Famous concept: a professional modelling school that will offer personal development and beauty courses.

Having worked as a model for some top international magazines, Ms Ost, who is from Germany, says she spotted a gap in the market for her business idea in the UAE.

Ms Ost, 25, had to juggle the demands of the Big Start contest with work for her degree at Middlesex University Dubai, where she has recently completed a course in media and communications studies.

Like other entrants, she was given advice on how to build her proposal under the mentorship of senior executives at Al Tamimi. Ms Ost says she worked up to 16 hours a day on university work and developing her business plan.

"For weeks in a row, I was working until the late night. Going to university the next day, I looked like a zombie, not like a model any more," she says.

Ms Ost says her business will need about Dh1.7m to develop. As chief executive of the new company, she will be responsible for launching the business, finding premises and recruiting staff, all under the guidance of Al Tamimi executives.

"I'm very excited, but I know what I'm getting into: a lot of hard work. I think the next year will be extremely tough," she says.

Rachael Wunsch, the chief executive of Al Tamimi, says the Big Start competition is primarily a corporate social responsibility initiative.

"We saw an opportunity to give back to the UAE community by inspiring and rewarding students and encouraging them to pursue their entrepreneurial dreams," she says.

"We challenge the students to think about how they will market their business, how many staff they will need, what their office rent will be - in short, all the practical details that translate a great idea into a workable business."

But she admits that Al Tamimi also hopes to profit from Ms Ost's SO Famous concept.

"We're in the business of making money and we're hoping that the students will also be in the business of making money," she says.

"We enter into a shareholders' arrangement with Stephanie. She gets a shareholding in the company, we also hold shares; it's a partnership moving forward. She'll take on the management responsibilities, but we'll mentor her through the programme. So she'll be working with our finance team, our marketing team, hopefully to give the structure behind her to make her a success."

Under the plan for SO Famous, Ms Ost says she will need Dh1.7m to launch the business. But Ms Wunsch says Al Tamimi will commit "as much as it takes to make it a reality".

"Typically, we look at funding of about Dh2 million," she says. "But it's 'how long is a piece of string'. If it's a fabulous business idea and it requires more money than that, then why not?"

So what can other budding UAE entrepreneurs learn from Ms Ost's success in the Big Start competition?

Ms Wunsch says a thorough knowledge of your business plan is a good start.

"Stephanie had put an exceptional amount of work into her presentation. And any question we posed to her, no matter how left field ... she was prepared for. And that's rare," she says.

Almost half of the entries to the Big Start were from commerce students. Ms Wunsch says those studying humanities may have been put off from participating - something the company hopes to address in the next Big Start contest, which starts in September.

"Unfortunately, a number of the students were concerned about putting together the financial model," she says. "For example, art majors are occasionally intimidated by the concept of putting a financial model together."

Jaimish Damani, who recently completed a degree in business management at Middlesex Univesity Dubai, was the runner-up in the Big Start contest.

Mr Damani, 24, submitted a proposal for a luxury car club, which he still intends to pursue.

"The best way of looking at it is to imagine a library, but not of videotapes, of cars," he says.

"The idea has been in my head for quite a while, for over three years. I noticed a lot of individuals ... who owned one, two or three cars. And when you calculate things like depreciation and interest, you realise that owning and keeping so many cars is really expensive."

The proposed club would be open to just 25 individuals, who would pay upwards of Dh15,000 a month to have access to a pool of 28 "very expensive" cars.

"It's very capital intensive, this business. That's one of the shortfalls, but on the other side, it's very lucrative," says Mr Damani.

"In the first year alone, I was looking for about Dh3 million from the sponsor, but then you would have to take a bank loan also.

"The total project cost was more than Dh10 million in the first year, to buy the cars, to set up the office, the infrastructure."

Despite not winning the Big Start, Mr Damani says the help from Al Tamimi in developing his business plan has encouraged him to seek investment elsewhere.

"I always told people that this is the idea and they were like, 'Great idea, but good luck finding those seven-digit figures'.

"So when you have such a very expensive project, you never look for an investor, you always figure it as a dream.

"But then when I joined the Big Start, it gave me that impetus ... It gave me that platform, that confidence to now go and approach others."

Like any entrepreneur, both Ms Ost and Mr Damani will face tough challenges in getting their businesses off the ground. But both have shown the determination in making their "big start".

"Everything [Stefanie] committed to in her business plan she'll need to deliver ... She's going to be incredibly busy," says Ms Wunsch.