SME profile: Dubai self-storage strategist likes to think out of the box
It seems appropriate in The Year of Reading to step into Wadih Haddad’s office in Al Quoz and find shelves stacked with business books.
The chief executive of the self-storage company The Box has copies of lots of business biographies, management manuals and investment guides, with the shelves containing everything from Good to Great by Jim Collins to the appropriately named Never Give Up by Donald Trump.
“I do a lot of audio books as well,” says Mr Hadid. “My car is like a university on wheels.”
He says he has drawn inspiration from many of these titles, particularly during the start-up phase of his business after he had quit a full-time sales job and was struggling to secure new customers.
“When you start as an entrepreneur, it’s all just bad news. Everyone around is: ‘are you crazy leaving your job? This is very irresponsible of you’ You just get all of the negativity in the world,” he says.
“That’s what happens because the people around you who love you so much, they’re the ones telling you this. They’re really looking out for you and giving you advice, but you need to be very cautious where you’re getting your advice from and for what. If I’ve got something wrong with my health, I don’t go to a mechanic.”
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Mr Haddad has become a passionate advocate of entrepreneurship and has set up BoxLabs as an incubator space to help other start-ups.
This service offers discounted office and warehousing space to appropriate start-ups and helps young e-commerce businesses with delivery and fulfilment.
“Our intention is really just giving back. If you would ask ‘what is our corporate social responsibility?,’ other than building green buildings, we support entrepreneurs because we believe that if they are successful, they can hire more people and bridge the unemployment gap. SMEs are the lifeline of every economy.
“We discount space, we provide mentorship and coaching, and it’s all just pure support. In some cases, we even give them the space for free for a certain period of time until they can pay their bills.”
Mr Haddad says he loves talking to other business owners for a couple of reasons. Firstly, he believes he can pass on some of his own experience, and secondly, he says he can learn from them.
“I always have a theory – don’t learn from your own mistakes, learn from someone else’s. If you learn from your own mistakes, you’re smart. If you learn from someone else, you are wise.”
Mr Haddad admits he found things tough when he decided to quit his job in sales to launch The Box as a full-time venture, but he is nothing if not persistent. He had gotten his sales job by knocking on as many doors as possible after arriving in Dubai, and he took a similar approach when trying to fill his first warehouse after founding The Box in late 2007.
“I’d send a mass email, go and get some intentions. Everyone wanted it, but no one signed and took the space.
“For the first two months I don’t think I got one customer. But then because I saw so many people and knocked and kept going at, it the intentions started coming in at the end of month two.
“After working really hard for four months I filled it up.”
For the first year, Mr Haddad did everything in the business – selling, picking up boxes, delivering and chasing payments. But after year one he had earned enough to start employing staff – initially in customer services, then accounts and other staff.
Yet this desire to reinvest caused conflict with early-stage investors he had convinced to lend him money to launch the business.
“I was opening new facilities and they were saying: ‘What are you doing? It’s not the right time.’
“The vision wasn’t really aligned, so I had to buy them out when the company was only four years old. That was very heavy,” admits Mr Haddad.
He has continued to reinvest ever since. The company now has close to 100 staff – about half of whom are on the company’s books and the others through third-party contracts with security and delivery companies. It also has a network of 36 facilities, with a heavy presence in Dubai but also units in Abu Dhabi, in Qatar and in Beirut. The company also has divisions offering moving services and a record-management arm, Black Box, aimed at document storage for businesses.
The network has largely been built by renting warehouse space from landlords, then fitting it out so that it matches the company’s branding and operational standards. However, a couple of newer units, including properties in Al Quoz and Dubai Investment Park, have been purpose-built.
“Before we couldn’t afford to do it – you just had to deal with whatever you had. And dealing with landlords isn’t fun. It’s a lot of energy and a lot of misalignment.
“When you invest a lot of money, they know that it’s hard for you to leave. And some take advantage of that,” Mr Haddad says.
The company has appeared on Dubai SME’s biennial list of the 100 fastest-growing small firms for the past two cycles, placed at 72 in 2013 and climbing to 51 last year.
“We’re doubling every year almost, which is heavy now. It’s easy to double and triple and grow by 10 times when you are small. But we’re still on that trajectory and focusing on multiple geographies,” Mr Haddad says.
Unsurprisingly, given the library of books around him, he says he spends a lot of time thinking about strategy, and he has a clear long-term goal for the business.
“We’re on a road map to going public,” he says.
“We’re working towards that. You can say that would be in three to five years. We’ve been approached by many private equity firms, by many family offices, and we’re basically setting up the business to go public, whether we do or not. It’s always great to have the right governance, the right team, the right policies and procedures. We spend a lot of time on that stuff.”
Mr Haddad is also eyeing a number of acquisitions – to facilitate geographical expansion and to help it to grab a bigger share of a fragmented market.
“It’s like that everywhere in the world – 94 per cent of the market, globally, is fragmented and 6 per cent is owned by conglomerates.”
David Abood, a partner at Core Savills, estimates that there are between 12 and 15 “established” self-storage firms in Dubai alone.
“Most of these are concentrated in Al Quoz – mainly because it is a centrally located warehousing district for almost all of Dubai’s client base,” says Mr Abood.
He adds that business patterns are also cyclical, with demand highest during the early summer months when people head off to travel.
“Almost all offer round-the- clock access with climate-controlled secure units.”
Mr Abood says that prices range from Dh250 to Dh300 per month for 10 square feet of space to Dh4,000 per month for 100 to 150 sq ft.
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