Recipe for start-up success in the UAE
"What is the secret to starting a successful business?"
It is a question often asked by budding entrepreneurs, and one that was posed to panellists last week at Tamakkan, a monthly seminar for those who want to start or expand small businesses in the UAE.
While local experts agree no magic recipe exists, they do weigh in with their thoughts about the ingredients needed to cook up a new venture.
Virtually all of them agree the best businesses rise from the right idea. "You have to identify a unique opportunity - something where you think I'm really going to make a difference," says Hans Schwab, a serial entrepreneur from Abu Dhabi who is working on the creation of a series of new apps, among other projects.
"If you feel it's just interesting, there's probably someone who's doing it better than you."
Market research is important, some argue, although many feel entrepreneurs in the country need to be willing to take more of a risk - and fail on occasion. Sometimes that means trying to determine what customers might want ahead of market demand.
"If I had asked my customers what they wanted," the car creator Henry Ford once famously said, "they would have said a faster horse."
More recently, Apple has been known to create products, such as the iPod and iPad, before customers really showed a mass interest in the devices.
"No matter how much research you do, at the end of the day, there's no way to completely research out your future and surely [have] success," says Moses Faleafaga, the co-founder of Popular Popcorn, which manufactures gourmet snacks from a facility in Al Ain.
But entrepreneurs should not assume a novel idea is always a good one, simply because it does not already exist in the Emirates.
"A lot of entrepreneurs think they have a great idea," says David Moleshead, the co-chairman of Envestors Mena, a network of private investors in the Middle East and North Africa (Mena) region who look to invest between US$40,000 (Dh146,938) and $4 million in start-ups.
Yet, sometimes, he says, "the reason it's unique, and nobody else has it, is because nobody wants it."
How an idea is sold to attract start-up capital has also changed in recent years.
During the last tech boom, and particularly in countries such as the US, it was common to see multimillion-dollar deals made after eager entrepreneurs scratched out their thoughts on nothing but a paper towel.
"We called it 'the napkin business plan', and it was enough to raise between $20m and $100m," says Mr Schwab.
But the world is at a different place today. To get most start-up capital, a thorough understanding of a company's financial potential is required, experts say. And business owners need to be ready to "pivot", says Mr Faleafaga.
"You have your initial idea, but [might] need to move in another direction. You can't be stubborn and not learn from what's happening; you have to be able to switch gears sometimes."
In Mr Faleafaga's case, that meant rethinking his business strategy to expand Popular Popcorn to multiple shop locations after the first one successfully opened more than two years ago in Germany. "Our business model was flawed in a way," he says.
"The problem was doing stores based on popcorn didn't really work: it's difficult to get locations - a lot of investments and operating costs. We suddenly hit a brick wall, so we switched around and said, 'let's change the distribution model and do a manufacturing packaging business.'"
Which is how Mr Faleafaga ended up partnering operators in the UAE and opening a production facility in Al Ain.
Now, the packets of his gourmet popcorn are sometimes handed out to passengers in economy on Etihad Airways.
To watch an exclusive video from Tamakkan, with some tips for entrepreneurs, visit www.thenational.ae/thelife