A chat with ArabNet founder
Omar Christidis talks to Kipp Report about, among other things, his five most compelling reasons to attend ArabNet's Digital Summit in Dubai.
June 23, 2013 5:45 by Muhammad Aldalou
Do you expect this vibe from Beirut translate here in Dubai?
The ‘vibe’ and spirit is one of the defining features of ArabNet, so I do believe a lot of it will translate in Dubai. Much of our audience travels from other countries to be here, so they’re not necessarily specific to Lebanon or Dubai. And when we did it in Riyadh, we had the same vibe, so I’m pretty confident about it. A big part of that excitement is brought by the entrepreneur element with a lot of people engaged at different capacities at the event.
What are your thoughts on crowd investing?
I think we’re going to see more and more people using crowd funding to grow their businesses. The process with a formal investor can, and will take three to six months at best, whereas, Nabbesh.com was recently able to raise 30 per cent of their target capital in two days.
The appealing part is that it provides entrepreneurs with alternatives and the more options they have, the better. They can set their own terms – assuming the market is willing to support those terms – and don’t necessarily have to settle for an investor’s if they don’t want to.
Also, when you have a hundred investors, you automatically have a lot of advocates. If someone’s invested in Nabbesh, they will feel a sense of belonging and ownership. And if their friends ask them “what platform should I use?” they’re naturally going to refer them to one they’ve invested in.
We haven’t seen how crowd funding is going to play out yet, because the space is really new in the region, but I think this sense of ownership could be very powerful. I think that one of the challenges in the region is the mismatch of expectations between investors and entrepreneurs, so I think crowd funding will serve as a good alternative.
You’ve said that e-commerce companies are making money at the expense of traditional retailers. How long do you think traditional retailers have before they truly suffer, assuming they don’t play catch-up?
The goal is not eventually to replace shopping; I don’t think that will ever happen. There’s a kind of serendipity about shopping, browsing through a store and picking out the things you want. But even within the store experience, and in the actual shops, we’ll be seeing a higher level of technological and digital integration.
I don’t have enough data to give you a specific date, but I suppose I could say three to five years. I don’t know if every penny spent online is at the expense of traditional retailers, because the market has grown and there certainly is new spending, but there is an element of cannibalization.
What sector is least affected by digital or web developments?
Mostly anything relating to making physical products like manufacturing, or even real estate development. But when it comes to communicating or selling those products, then we’ll see the real influence of web and digital integration.
Transparency with regional investments and acquisition
When Dubizzle received an investment, and I asked the founders why they didn’t disclose their amount, they said it’s because they didn’t want their competitors knowing how much money they had in the bank.
People here may not want to talk about their valuations but I think it’s critically important that we do. There’s not enough information out there, and transparency will help us set industry benchmarks and understand what a business is actually worth.
The worst part is that when someone looks to invest into or buy a business, there are rarely other deals to compare it to, and without enough data, there’s not enough clarity in the industry for first-time angel investors. Obviously, with Venture Capitalists, the more deals or acquisitions they’re involved in, the more likely it is they will have their internal benchmark. As far as angel investors go, there’s just not enough information for them to make decisions.