What makes an entrepreneur tick? In this new segment, Entrepreneur Exchange, Qatar Today tries to answer that question. We start with Muhammed Mekki, the founder of online fashion website Namshi.com, which recently received a $20 million capital injection from keen investors. WHAT MADE Mekki quit his dayjob to go for broke with little or no experience in e-commerce or fashion?
by rory coe n
It's all in the
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170 employees in Dubai, of 25 nationalities In-house delivery company for UAE orders. Doorstep returns and option to pay credit card on delivery 600 brands online and in stock, largest online FASHION collection in MIDDLE EAST. Shipping to the entire GCC, AND launching Namshi in Lebanon in April 2013 Raised funds from top-tier VC/PE shops like Summit Partners, JP Morgan, Blakeney Management
ooking back at how he and his two business partners founded their start-up company must make Muhammed Mekki cringe with embarrassment. He has since taken a step back from his managerial role, now simply advising from afar as he concentrates on other projects, but he’d be the first to tell you how important that initial journey into the unknown is for budding entrepreneurs. In the space of 18 months, his company went from a discerning observation into a $20 million reality. Mekki grew up in Silicon Valley, immersed in invention and innovation, and it was this environment that proved to be the harbinger for his subsequent forays into risky business. The son of Iraqi medical professionals, his decision to quit his salaried job to run an e-commerce website might not have been greeted with the unbridled encouragement he’d hoped for, but his parents would also have known that his day job was just a stopgap until his “eureka!” moment arrived.
Mekki’s moment came in the summer of 2011. Working as a consultant in Dubai and perennially plugged in to the digital grapevine for opportunities to explore, he spotted a gaping hole in the regional market. “I realised there was nobody doing fashion – selling clothes, shoes or accessories – online,” announced Mekki. “So I decided this would be my focus.”
Whilst their approach was laden with enthusiasm and freshness, it was cloaked in naivety. “We realised we had to build slowly and surely. We had to take it step by step, build our name and reputation.”
The idea didn’t stay dormant for long, and realising that two, if not three, heads were better than one, he invited two trusted and capable friends into his inner circle of trust. They needed to conceptualise the idea further before packaging it attractively for incubators and angel investors. This raw idea needed to be cooked. “So within a few months we needed to prove this concept,” said Mekki. “We had nothing to begin with – we didn’t even have a name, just an idea. The three of us got together in a little office, with a couple of com-
puters and a phone, and we started calling brands in Europe, the US and even some local brands in Dubai. We had some money, but we needed products.” They were at a whole lot of nothing, however. Mekki, armed with his PhD, had never worked in e-commerce or fashion before. Nor had his partners. Whilst their approach was laden with enthusiasm and freshness, it was cloaked in naivety. Brands could not have cared less for their business, regardless of their promise of cash. They needed to see evidence of success and reputation. Mekki hinted at the harsh reality he experienced at this early stage. “We realised we had to build slowly and surely,” he said. “We had to take it step by
You need to pick the right people and empower them to work to their potential. One of the things I learned is that the number one thing is your team and incorporating a working culture amongst them.
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step, and build our name and reputation. So we built our website, Namshi.com, and tackled each targeted brand one at a time until we began to build up our portfolio, and before long brands were calling us to do business. Now we have about 550 brands, it’s more than you would find in Dubai Mall, so we have actually introduced some brands to the region.”
“You need to take risks as an entrepreneur, but they should be controlled risks with lots of research and professional advice behind the decisions.”
Mekki and his cohorts weren’t immune from mistakes after recovering from their early one, however. He explained a few more costly errors of judgment as they tried to expand the site. “One of the things I learned with Namshi is that sometimes it’s better to just jump into the pool to learn how to swim,” said Mekki. “You need to take risks as an entrepreneur, and coming from a consultant and planning ideology that was a hard adjustment for me, but they should be controlled risks with lots of research and professional advice behind the decisions. “We launched the website in December 2011, primarily selling shoes at that stage. Early the next year we were across the GCC, including Qatar. We had added the Arabic language and the working currencies. So taking it all one step at a time, we decided we were ready for Egypt last April. It’s such a huge market, it was so enticing,” he said. It proved to be an expensive error. They ran successful advertising campaigns which translated into hits on their website. The orders came flooding in and for a while the decision must have seemed like an inspired one, but it soon transpired that the customers weren’t receiving their orders. There were issues with customs checks and delivery addresses. Even Napoleon had more luck in Egypt, so they decided to cut their losses last summer, less than three months after their initial break into the market. “We obviously didn’t do our homework
We had nothing to begin with - we didn’t even have a name, just an idea.
on Egypt,” said Mekki. “From here on we really started to focus on our costs and made sure we were able to ship our products efficiently. By September we got our television advertisement on MBC, and that led to big things – people really started to recognise our brand after this.”
being distinctive in the areas that matter most was the key driver of the business model.
Namshi recently secured a $20 million (QR72.8 million) injection from JP Morgan and Blakeney Management. The e-commerce business isn’t even two years old yet! So what does it take to build an idea from scratch into a lucrative business that is worth a $20 million investment? “When you do a start-up, you forego a salary and a bit of security, but you get shares in your company,” explained Mekki. “So you try to build the company, add value to it,
We spent that little bit extra to make sure we did things better than everybody else.
produce something that is beneficial to the market, so that those shares will eventually command a much more valuable price. “You need to pick the right people and empower them to work to their potential. In starting up a company, one of the things I learned – and I had a sense of this beforehand but I didn’t really appreciate it until I got involved in Namshi – is that the number one thing is your team and incorporating a working culture amongst them. The most important decision I made was who would be the first person I turn to – who was going to join me as a co-founder in this project. So what I looked for in this person was one who had the same values as me, the same mindset, the same priorities. We discussed all this beforehand; we wanted to build a company that is people-centric, one that really cares about its employees, where we are all proactive and we do things in a legal and ethical way. Setting that common standard made life so much easier going forward because we both knew we were on the same page.” Mekki revealed that being distinctive in the areas that matter most was a key driver of his business model. He identified three areas in particular where they could gain an edge on their competition and “do things better than everyone else” – shipping, selection and customer service. “When we were thinking about Namshi, we looked at the biggest gaps in the segment or the biggest problems with shopping online. The most fundamental one was shipping – getting the product to the customer on time. We buy our products and store them in our warehouse in Dubai Logistics City, and ship them as soon as we get a confirmed order. This is different from other e-commerce players who get the order and then try to find and purchase the product in the market. “We also wanted distinction in customer service. We spent that little bit extra to make sure we did more than everybody else. One of the most difficult hires I had to make was for the role of Customer Service Manager. We ended up bringing in, eventually, the lifestyle manager at the Armani Hotel in the Burj Khalifa. Somebody who was used to dealing with sheikhs and sheikhas – this was the mentality we wanted for this role”
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