From CEO to angel investor, and why you shouldn’t go to business school

Fadi Ghandour is co-founder of one of the Arab world’s largest companies, writes Ben Flanagan, and has invested in more than 80 smaller ventures in the region. So he knows what he’s talking about when he describes starting a business as a “guerrilla struggle”.

The seasoned entrepreneur founded logistics firm Aramex in 1982, taking on the likes of DHL and FedEx, and which in 1997 became the first company from the Arab world to trade shares on the Nasdaq in New York. The company later went private before launching another listing on the Dubai Financial Market.

Having stepped down as chief executive of the courier firm in 2012, Mr Ghandour has since turned his attention to investing in startup business in the region, through his initiatives Wamda Capital and MENA Venture Investments. His track record in the field is impressive, notably with his early involvement with Maktoob, the Arab web portal that was acquired by Yahoo for $165 million in 2010.

Here Mr Ghandour, who is Jordanian, describes the gear shift from being big CEO to angel investor – and why he’d never recommend going to business school.

Q. Aramex went from being a startup, to a big business, to a global listed company. How different are the leadership skills required in each of those three phases?

In the start-up phase you are engaged in a guerrilla struggle in a vicious jungle and you are in the business of survival. Once you are out of the jungle, you take a bath, clip your nails, comb your hair, and protect the clients you have and build a brand that is respected and admired. Going global and listing the company on a global exchange like Nasdaq is your coming out party. You are beautiful now, and ready to show yourself to the world with confidence, maturity and transparency. You are with the big boys now. Each phase is very different from the other and you had better know how to adapt to each very fast.

 Q. It is three years since you stepped down as Aramex CEO. How have your leadership skills changed since you shifted your focus towards Middle East start-ups?

I am running a much smaller company, a start-up of sorts, so I have to reinvent myself from a big company CEO to starting all over again – a totally different set of skills. But building a business in the digital age and in the 21st century is different – and similar – in many ways from what I started doing in the 1980s. It is similar to the Aramex way of managing and our culture. So being agile, networked, connected, fast, responsive, customer centric and managing talent, is the same as what companies need to do today, except it is turbocharged to Nth power. The mobile connectivity has accelerated everything to a level that is dizzying and talent is much more essential in a networked organisation than ever before. It’s lots of fun, but I am having to catch my breath all the time now, having to unlearn old things and relearn new ones on a daily basis.

Q. How many startups have you invested in so far, personally and through the likes of Wamda Capital and MENA Venture Investments? And what is the most common piece of advice you give to the young entrepreneurs that run them?

We have over 80 start-ups and growth companies in our portfolio. My most common piece of advice to entrepreneurs is to think they are builders of the business, know the client, work with a team of people that fit a culture that is unique to your company and then you can take your start-up places.

Q. Imagine you’re a 30-year-old middle-manager who wants to launch their own venture. You have $150,000. Would you spend that money on going to business school, or launching a startup and learning on the job?

Certainly not business school.

Q. You started ‘courier week’ at Aramex, where office-based employees spent a week delivering packages. In general, how willing are Middle East business leaders to ‘get their hands dirty’ by working with front-line employees?

If you don’t get your hands dirty and you don’t appreciate people on the front lines – who are your image, your brand, and your narrative – you risk missing what is important about your business, which is the client. And if you miss that story someone is going to eat your lunch, whether you are in the Middle East, China, or Gabon.

Q. You said at the ‘Egypt the Future’ investment conference in Sharm el Sheikh that Middle East school kids should be taught basic financial and entrepreneurial concepts. What is the next step in making that happen?

If we do not do that then we are taking a whole generation of people and telling them that they are going to be fit for jobs only in the public sector, and the public sector is not capable nor willing to employ any longer. If we want to solve the employment challenges we need to understand what markets require for current and future jobs, and introduce that knowledge in our schools. That requires a serious political will to completely revamp what we teach our kids now. Reinventing our curriculum, and teachers at the same time. We don’t want all our kids to grow up to become entrepreneurs, but we want them to have an entrepreneurial mind, that thinks solutions, has good oral and written communications skills, knows how to analyse information and has deductive and critical thinking skills, numeracy and language skills. It is a mammoth task with generational impact. We start now and see results in 10 to 15 years. Otherwise we are doomed to perpetual turmoil.

Q. There is much more angel capital sloshing around the Middle East than there was a few years ago. But – given more and more startups are emerging – does the added competition mean it is actually harder to obtain angel funding in the region?

On the contrary: the more angel funding the more companies are created, the more entrepreneurs enter the start-up challenge, the more chances of success, and so on. It is a virtuous cycle, each feeds positively into the other.

Q. Dubai’s startup scene is thriving, but do you seem much activity in Oman?

Dubai has emerged only in the past two years as the go-to place for tech entrepreneurs who have started their businesses in other places in the region. It is a must for every entrepreneur that wants to scale and grow their business, it is the hub for e-commerce, media and advertising businesses and it is how people get ready to go to big markets such as Saudi Arabia etcetera. That has brought lots of entrepreneur wannabes from big companies and consulting firms to leave their secure jobs and jump into the entrepreneurial journey. Dubai is a plug-and-play city that understands what it takes to attract talent and nurture it. Namely an open market, easy to get visas, world class airport, world class sea port, easy registration of a business, free zones that bypass local bureaucracy, world-class real estate, and a quality of life that is attractive to generation X, Y and Z. Oman needs to find its own niche, for tourism, talent, beautiful and amazing culture, and connectivity to the rest of the world. And there is no reason why it cannot do what Dubai or Singapore did, you just need to do it in a way that fits your strengths and culture.

Q. You’ve said previously that you will only retire once you’ve proved that the GCC is a region where global investors should put their money. How close is that to becoming a reality?

Haha, I have said that in reaction to people continuously asking me the silly question about whether the region with all its turmoil is a place to invest in and more importantly the question of investing in the digital-economy businesses in the Arab world. I mean give me a break, this place is still thriving, and the digital economy has arrived and it will disrupt everything we do, and we had better invest in it and embrace it, or else it will sweep us away.

Advertisements