New Article Series: Service Leadership Wake-Up Call (with Ron Kaufman)

Service Wake-Up CallEver since I attended The Service Leadership Workshop with Ron Kaufman in May, I’ve been getting angrier and angrier.

The problem wasn’t that the workshop was disappointing. I think it was one of the best workshops I have been to, and I go to many of them. I’m very grateful to the Badir Program for inviting my partners, some AccMakk participants, and I to this excellent workshop, and to King Abdullah Economic City for hosting the event.

And the problem wasn’t that Ron was unqualified to discuss the topic. Ron has earned an international reputation as a consultant, columnist, and public speaker. He is the author of the best-selling Uplifting Service and the founder of UP! Your Service, a training company specializing in customer service. He had a high level of energy and really involved the audience in the workshop.

No, what has made me angry is that, after Ron showed me the different levels of customer service, I began noticing that most of the services in my area are at the basic or even criminal level in terms of customer care! This is true for most businesses I have visited in the Makkah and Jeddah areas.

But let’s start from the beginning. In this first installment of my series on Ron’s service excellence principles, I will introduce how Ron Kaufman defines service, value, and service professions, along with why this information is especially important to start-up businesses.

What is service?

Early on in the presentation, Ron asked the audience “What is service?” He asked each participant to discuss this with a partner sitting nearby.

After letting everyone talk about different definitions, Ron said “we can’t have everybody interpreting service a different way.” If everyone sees service in their own way, a company’s staff will be confused and won’t know how to act.

The widely-applicable definition of service Ron proposed is that “Service is taking action to create value for someone else.”

What is value?

“Creating value” is at the core of Ron’s definition of service.

Value-creating activities can include:

Solving a problem
Answering a question
Taking an order
Installing something
Activating a feature
Training someone
Upgrading something

According to Ron, anything that is wanted, needed, or appreciated by another person can be considered value.

Who is a service worker?

Is it only the duty of customer-facing employees to provide value? What about the rest of us?

“All of us are in service positions,” said Ron. Even professionals who insist that they are not in a service profession are getting paid to provide value to someone else.

Now, how many employees and professionals here in Saudi really go to work each day to take action that creates value for someone else? When you go to the bank, talk to your phone company, fly on a Saudi-based airline, or visit your local municipal office, do you feel as if the person you are working with is really there to serve you?

The start-up advantage…

As a start-up owner, you have a huge service advantage over the slow-moving bureaucracies mentioned above. They have decades of bad habits, cynical managers, and a reputation for poor service to overcome. But your start-up can adopt a company-wide definition of service and begin focusing on providing value to customers today. This is an area in which your new company can definitely beat entrenched competitors.

“I believe service is the ultimate competitive and sustainable advantage,” said Ron Kaufman on his website, and I think many investors agree.

Next week, I will introduce you to Ron’s 6 level of service, and rate some of the services in the Jeddah area and Makkah area using his guidelines, so please bookmark OsamaNatto.com and check back on Wednesday morning.

Meanwhile, if you have had any wonderful service experiences you would like to share, or any horror stories of receiving terrible customer care, please share them in the comments section below.

The Ivy League, Silicon Valley, and Saudi Arabia: Why Rejecting Western Ideology is Good for Entrepreneurship (with Athar Mian)

The Ivy League, Silicon Valley, and Saudi Arabia

Photo courtesy of Bexx Brown-Spinelli.

Global strategist Athar Mian has posted another perceptive response to one of my latest articles, Drop Out to Start Up? The Debate and What I Really Think, in which he examines non-Western entrepreneurship.

From his international entrepreneurial ventures to his high-level technology venture advising, Athar’s uncommon viewpoints come from his uncommon experiences. His opinions do not necessarily reflect my own.

I have added a title and links to his response for ease of reading. The text is otherwise unchanged.

لدينا مشكلة: اين رواد الأعمال الحقيقيين؟

لدينا مشكلة: اين رواد الأعمال الحقيقيين؟تمتلئ المملكة العربية السعودية بمن يريدون ان يصبحوا رواد اعمال:  يحضرون فعاليات ريادة الاعمال، يطلقون على انفسهم رواد اعمال، حتى انهم يأتون بمن يطلق عليهم رواد اعمال، لكنهم ليسوا رواد اعمال حقيقيين. هناك 5 انماط من رواد الاعمال المدعين، وسوف اغطي هذه الانماط في هذا المقال على امل اما ان يغوصوا او ان يبتعدوا عن الطريق لصالح من هم جادين بشأن ريادة الاعمال. واذا كنت قد شعرت بالاهانة من الفقرة الاخيرة، فمن المحتمل ان تكون احد الاشخاص الذين اتكلم عنهم، لذلك اعتبر هذا دعوة للاستيقاظ.

اين رواد الاعمال السعوديين الذين تربوا بالداخل؟
اتلقى العديد من المكالمات من المنظمات المحلية والعالمية التي تطلب مني ان ازودهم باسماء رواد اعمال سعوديين محليين، تربوا بالداخل، اما لكي يظهروا في فعالية، يلقوا كلمة في مكان ما، أو ليتم ترشيحهم لبرنامج، او لكي يتم ترشيحهم لجائزة.
ينبغي ان ارسل لهذه المنظمات قطعة ورق بيضاء مع توقيعي في الاسفل، لأنني كل مرة احاول ان اكتب قائمة كهذه، لا استطيع ان اجد رواد اعمال سعوديين حقيقيين غير معروفين بالفعل. انها دائما نفس القائمة، لنفس الاشخاص تأتي مرة تلو الاخرى.
ها هي القائمة التي تأتي دائما، ببعض من رواد الاعمال السعوديين الحقيقيين:
•   
قصورة الخطيب
•   
نايف القحطاني
•   
رشيد البلاع
•   
عبد الله المنيف
•   
لؤي نسيم
•   
عصام الزامل
•   
خالد سليماني
•   
ماريا مهدالي
•   
هاني خوجة
•   
أسامة نتو) نعم، انا)

الآن، قائمة الاشخاص الذين يطلقون على انفسهم رواد اعمال في المملكة العربية السعودية ضخمة. انا على اتصال بحوالي مائة او مائتين منهم. لكن عندما انظر اليهم جميعا، الالآف ممن يطلق عليهم رواد اعمال، افحصهم بشكل فردي، واعرف المزيد عنهم، فقط القليل منهم رواد اعمال حقيقيين.
اذا كنت رائد اعمال حقيقي، فانت تبتكر شيئا جديدا، سواء كان منتج، خدمة، او منظمة. ثم ياخذ رائد الاعمال الحقيقي هذا المنتج، الخدمة، او المنظمة وينميها، ويجعلها تكبر وتصل الى المستوى القومي والعالمي. رائد الاعمال الحقيقي يساند ما يصنعه، متغلبا على العوائق على طول الطريق. معظمكم غير موجود هناك. اليكم الـ 5 فـئات التي يندرج تحتها بقيتكم من الذين يريدون ان يصبحوا رواد اعمال:

1. الموظف صاحب الهواية
لديك موقع إلكتروني جميل جدا، خدمة، منتج، او منفذ بيع بالتجزئة، ولكنك لا زلت متعلق بشدة بوظيفتك اليومية. او ربما تكون طالب لا تزال تذهب لحضور محاضراتك يوميا لكي تستمر في اخذ بدلاتك الجامعية. تضع قدم في ريادة الاعمال وقدم اخرى في الدراسة أوالتوظيف فقط لانك غير واثق. اما انك غير واثق في نفسك، في منتجك، في خدمتك، او في السوق. انت لا تصدق ان ما ابتكرته سوف ينمو الى مستوى ترضى عنه. انت لست رائد اعمال … انت هاوي.
اذا كنت رائد اعمال حقيقي، كنت ستخلق الوظيفة التي تريدها فعلا وكنت ستبدأ في عمل ما تحبه فعلا طوال الوقت. كنت ستنمي منتجك، تنمي خدمتك، وتنمي شركتك. حتى تستقيل من وظيفتك اليومية، تترك دراستك، وتضغط عائلتك.
رجاء.. لا تطلق على نفسك رائد اعمال. فقط اخبر الناس انه، بالمناسبة، لديك عمل جانبي صغير لكي تربح اموالا اضافية.

2. الموظف صاحب المحفظة المالية
مثل صديقك في الاعلى، تعمل في وظيفة مكتبية، ولكن ايضا تستثمر المال في شركات اخرى. يا ويلتاه..السعودية تعج بكم يا شباب. تعتقد ان هذا يجعلك رائد اعمال!! لكن في الحقيقة، الشاب الذي يدير الشركة التي استثمرت أنت بها هو “رائد الاعمال”.
انت لست رائد اعمال. انت مستثمر.
حتى تتوقف عن مناولة الاوراق لمديرك، لا تطلق على نفسك رائد اعمال. كن صادقا واخبر الناس انك موظف ومستثمر.

3. نادي الأولاد الأغنياء (او البنات)
انت عضو فيما اطلق عليه نادي أبناء الاغنياء، وانت اكثر المجموعة ازعاجا. انت جزء من الجيل الثاني، الثالث، او ربما الرابع لعائلة سعودية غنية، معروفين انهم تجار، او لهم مركز عالي في الصناعة. تقود سيارة غالية، ترتدي ملابس فاخرة، وتسافر بالدرجة الاولى. تستخدم اعانة والدك لتبدأ بضع الاعمال الصغيرة هنا وهناك، لكنك لا توسع نشاطاتك. انت لست رائد اعمال. انت فقط “شاب غني”. اذا كنت رائد اعمال تصادف ان تكون من عائلة غنية، فلابد أن تكون أنت من يصنع طريقه. وانا اعرف بعض الامثلة. ربما تستخدم اموال عائلتك، ولكنك لا تعتمد عليها. حينما تستخدم المال يتوجب عليك ان تخلق فكرة عملك. تاخذ المخاطرة، تطور عملك، وتنميه ليصل للمستوى القومي والعالمي. لا تذهب للعائلة من اجل الدعم المالي في الاوقات الصعبة؛ عليك أن تحلها بنفسك.
حتى تفعل هذا، تذكر انه أن تكون غنيا لا يجعلك رائد اعمال، وان تكون رائد اعمال لا يجعلك غنيا.

4. التاجر
تبحث عن تجار الجملة، تشتري اشياء بالجملة، ثم تبيعها بالتجزئة. تختار مكان لكي تفتح متجر، تؤلف مزيج منتجات محترم، تضع الاسعار على كل شئ، ثم تبدأ في البيع. تستطيع ان تطلق على نفسك رائد اعمال، لكن داخلك، انت تعرف ان اي شخص لديه بعض المهارات الاساسية وبضع مئات الآلآف من الريالات يستطيع ان يفعل ما تفعله انت. اي شخص يعرف كيف يجد موقع، وكيف يجد تجار الجملة، وربما من يسافر الى الصين يستطيع ان يحل محلك. انت لست رائد اعمال. انت تاجر.
اذا كنت رائد اعمال، سوف تاخذ نموذج العمل الصغير وتجعله ملكك. تجعله علامة تجارية. تخلق خدمات القيمة المضافة مثل التوصيل، مزيج منتجات ممتاز، او منتجات متكاملة، وتستخدم هذا لتنمي وتساند مشروعك.
حتى تبدأ في خلق قيمة بدلا من بيع وشراء اشياء اناس آخرين فقط. فضلا.. اطلق على نفسك لقب تاجر.

5. صاحب حق الامتياز
تدير عمل بنظام حق الامتياز، سعيد بان تعتمد على افكار شخص آخر وتدفع له رسوم حق الملكية. انت لم تخلق العلامة التجارية، ولم تصمم المنتجات أو الخدمات، او حتى فكرة العمل نفسها. انت فقط اعدت تطبيق فكرة، ربما من آسيا، اوروبا، او الولايات المتحدة، كانت جاهزة بالفعل قبل ان تأتي انت. انت لست رائد اعمال. انت صاحب عمل صغير. او اذا كنت متفقا مع شركة كبيرة تمتلك المئات من السلاسل، اذن فانت مستثمر. اذا كنت رائد اعمال حقيقي، سوف تكون انت الشخص الذي خلق حق الامتياز بدلا من شرائه. حتى يبدأ اناس آخرون في الدفع لك مقابل حقوق الملكية، فانه من غير المهم عدد الفروع التي تديرها، لانك لا تزال لست رائد اعمال.
لذلك، اخبر الناس انك تدير حق امتياز، ثم اسال اذا كانوا يريدون بطاطس مقلية مع طلبهم.

دعونا نراجع.

1.      ادارة مشروع جانبي بينما تعمل في وظيفة يومية او الحضور في الجامعة ليس ريادة اعمال

2.      . الاستثمار في شركات اخرى ليس ريادة اعمال.

3.         ادارة عمل صغير بدعم كامل من عائلتك الغنية ليس ريادة اعمال.

4.      بيع وشراء اشياء اناس آخرين بدون اضافة قيمة مبتكرة ليس ريادة اعمال.

5.        امتلاك عمل بنظام حق الامتياز لم يكن لك يد في خلقه او تطويره ليس ريادة اعمال.

هذا خبر سيئ للسعودية.
لدى السعودية مشكلة خطيرة في تنمية رواد الاعمال المحليين. لا يوجد الكثير من رواد الاعمال السعوديين الذين تربوا بالداخل حقا، بالكامل من البذرة الى الثمرة. هذا يمثل تحدي حقيقي. اذن… من هو المسئول عن العمل على خلق رواد الاعمال هؤلاء؟ انت، رائد اعمال المستقبل، جنبا الى جنب مع عائلتك، المجتمع، وانا. جميعنا مسئولين عن البيئة التي نخلقها.

الآن، هيا بنا نعرف حقا ريادة الاعمال.
نحتاج الى تعريف واضح لمن يريد ان يكون رائد اعمال… من هو رائد الاعمال الحقيقي؟؟
رائد الاعمال الحقيقي هو شخص يفعل جميع ما يلي:

1.      لديه فكرة

2.         يبتكر منتج او خدمة

3.         يخلق شركة

4.         يخلق علامة تجارية

5.         يخلق قاعدة عملاء

6.         يؤلف معا مزيج المنتجات

7.        يؤلف معا مزيج التسعير

8.      ينمي شركته ويجعلها تصل للمستوى القومي او العالمي

9.        يتغلب على التحديات

10.    يفعل كل هذا مرات ومرات

تحتاج السعودية للمزيد من رواد الاعمال لكي تخلق مناخ ريادة الاعمال.
نحتاج لخلق اقتصاديات فرعية جديدة في السعودية، من أجل خلق قيمة خارج الاقتصاد التقليدي للبترول والغاز، العقارات، والاعمال كثيفة الاستخدام للقوى العاملة منخفضة التكلفة. بدون اقتصاد يخلقه رواد الاعمال، سوف يظل نمو الوظائف في مستويات منخفضة ولن نرى شباب عصاميين جدد. سوف يظل هناك فقط مليونيرات وبليونيرات يساهمون في ازدهار السعودية.

إسأل نفسك: كيف يمكنني مساعدة هذا البلد في خلق مناخ ريادة الاعمال؟
استقيل من وظيفتك اذا توجب عليك ذلك، اترك دراستك اذا توجب عليك ذلك، وكن جادا بشأن ريادة الاعمال. المرة القادمة التي استقبل فيها مكالمة تطلب قائمة برواد الاعمال السعوديين، اريد ان اكون قادرا على كتابة قائمة جديدة، واريدك ان تثابر لكي يكون اسمك على هذه القائمة.

الآن … توقف عن قراءة المشاركات واذهب وكن رائد أعمال حقيقي.

Please note: An English version of this post is available here: Saudi, We Have a Problem: Where Are The Real Entrepreneurs.

Drop Out to Start Up? The Debate and What I Really Think

As I said in An International Strategist’s Perspective on Dreaming Big, my recent articles have lead to insightful online discussions, including a debate that took place on my Facebook profile.

The article How Getting Rejected From Every University in Saudi Arabia Helped Me Launch a 5-Million Dollar Business sparked some controversy, especially because I wrote “Today, I encourage Saudis to drop out of school, abandon their family businesses, and quit their jobs if it helps them get serious about entrepreneurship.”

Many people weighed in on whether it is right to encourage students to drop out of school. In this article, I will share just a few of their comments, then explain what I really think about this controversial topic. For ease of reading, I have combined different sets of comments when written by the same person, as well as added links. Otherwise, the comments are unedited.

A Dream Alone is Not Enough

Khalid Suleimani, President of the SIRB angel investment network, disagreed with the idea of encouraging entrepreneurial students to drop out:

Even though I’m one of those who dropped out of the Ph.d program to start a business, I think you need to clarify that a dream is not enough.

Being equipped with the right tools, capital, and a proper study of the market is an absolute requirement. Taking a test to c if u can endure the pressure of business should also be recommended. Some people get into this for all the wrong reasons, loosing time and money they can’t afford.

I talk about this dropout myth in my book. Few became rich after dropping out, but the majority had a good education (YouTube, yahoo, and instegram) . Some only dropped out after securing/foreseeing a huge deal. Like the google founders, and bill gates.

Osama, I would not encourage someone seeking heigher education to dropout if he/she has the enrtrprenuership bug. Education might broaden his horizons to create a disruptive solution to change the world. Google founders algorithm was part of their Phd work. They only dropped out to commercialize it. Had they not went to Stanford, they would never had thought of it.

If u don’t have the bug, it don’t matter. Depends if your next job requires it or not.

Khalid is definitely right in saying that a dream alone is not enough. The idea that all it takes to become rich is “a dream and hard work” is a fairytale, as I discuss in 4 Tough Questions to Ask Yourself Before Launching a Start-Up in Saudi Arabia. A dream is just the beginning, but we all have to begin somewhere.

The person who left the next comment also expressed herself clearly on this matter.

The Dangers of Fetishizing Drop-outs

Nermine Hassan, Consultant at Elixir Management, took a strong stance against encouraging entrepreneurial students to drop out:

In my opinion, encouraging Saudis to drop out of school is very damaging to their futures and may lead to grave consequences. Ideally there should be no trade off between entrepreneurship and education and ideally education, knowledge and self development should be a tool of empowerement and knowledge towards more successful entrepreneurship. I think your real argument and underlying statements here should be: 1. to “up” the Saudi educational system to reflect the current needs of the job market / entrep opportunitites in the kingdom; 2. the israr / perserverance one must have (as you did) in the case that he was rejected from schools and jobs he was striving for and to keep trying. 3. Encouraging angel investors to give youth a try, and easin up legalitiles needed for startups as setting up an enviroment for entrep is critical in the first place.

Those who fetishize the dropout are perpetuating a very particular logical fallacy: The path of leaving school is what leads to success, and not the extraordinary abilities of those who chose it. “It’s insane—you drop out and you become successful?” says David Rose, CEO of early stage angel investing platform Gust. “I would posit the people who drop out and become successful do so in spite of it, and not because of it.”

Again, Nermine is right in advocating for an educational system more aligned with the needs of the business world, as discussed in the article Grading the Saudi Entrepreneurial Ecosystem: A Report Card by ICT Veteran Barig Siraj. Likewise, an entrepreneurship-friendly business environment and entrepreneurs with perseverance are important features of the ecosystem we need.

However, both of these responses seem based on the idea that I am encouraging most or even all entrepreneurial students to drop out.

The next comment shows a different interpretation of my article.

Enjoying Freedom to Fail

Moizuddin G. Muqri, Strategist for Business, Marketing & Social Media at House of Specialties Group, considered this to be my message:

Freedom to Fail is what you preach and you are right. Thank you for this article. Having gone through failures of my own in the last 5 years, I finally came to realize how much of those failures were a blessing for me. In fact the problem you highlight is more or less present in all of Arab & Non Arab Muslim societies. Everyone wants to play it safe, whether he/she’s a student opting for a career path or an established business owner or business familia. You are encouraging Saudis to believe in themselves & not be dependent on the goverment or the private sector which is in the control of few. God bless ya buddy. You are not encouraging people to drop out, you are encouraging them to not to fear possible failures for initiatives that will make them independent & real contributors to society, economy & nation

This last comment reflects my mindset in How Getting Rejected From Every University in Saudi Arabia Helped Me Launch a 5-Million Dollar Business. After all, that article is the story of how I wanted to go to school so much that I kept applying until I had been rejected from every university in Saudi Arabia, then kept trying after that.

I clearly don’t think getting a college education is a big waste of time for everyone. But it is also not a magical experience that is wonderful for all young Saudis and must never be given up or even criticized.

A college education is an investment. Like all investments, it is right for some people and not others. This is true for entrepreneurs as well.

My View: Dropping Out as a Business Decision

The idea of dropping out of school as a business decision, like quitting a job or choosing a co-founder, is offensive to some people. But everything in an entrepreneur’s life becomes a business decision eventually.

The idea that dropping out to start a business should be encouraged or discouraged takes away from how complicated this decision can be and how different the lives of entrepreneurs are.

I hope the following case studies will show why this is true.

Case Study #1: Kassem Bagher

Kassem Bagher is one of the co-founders of ShopMate, a mobile platform that connects customers to the types of products they are already interested in. He dropped out of KAUST in 2012 to launch ShopMate, and I think he made the right choice.

After first joining the recently-formed ShopMate team as an iPhone developer, Kassem felt himself swept up in the idea of this innovative new app. He believed so strongly in ShopMate that he soon poured his entrepreneurial dreams into the budding project. With his course load cutting into the time available to work on making the app successful, Kassem soon dropped out to devote all of his time to its development.

Alongside him was his friend and fellow ShopMate programmer Abdullah Asiri, the serious KAUST student who had come up with the app as a weekend project and ended up dropping out in pursuit of an entrepreneurial future he had never seriously considered before.

I know because I incubated ShopMate. Kassem, Abdullah, my team members, and I started out working together in Office 51 of the Al-Bassam Business Center in Jeddah. Eventually, our project evolved into App51, a company that designs and markets lifestyle-based mobile applications.

We worked together for almost two years. Now that investment for App51 is well underway, Kassem and Abdullah have partnered with our own founders to launch Waqood Tech, an IT company focused on providing mobile application, Web development, user interface, user experience, and branding solutions to other app developers.

So, looking at attending KAUST as an investment, Kassem weighed it against the investment of launching his first start-up and picked the second. Considering that, in his case, staying in school was taking time away from his goal of launching his own business, he stayed true to his dreams by dropping out.

Case Study #2: Rinaldi Medali Rachman

Rinaldi Medali Rachman is a member of the entrepreneurial team known as ROFix (Reverse Osmosis Fouling Index). ROFix has created an innovative device that predicts when membrane fouling will occur at a water desalination plant and what type of fouling will occur.

KAUST has provided Rinaldi and the ROFix team significant amounts of seed funding. Rinaldi’s team includes one of the Principal Research Scientists at KAUST, Dr. Noreddine Ghaffour, who has over 20 years of experience in R&D and aquatic management. Rinaldi also has access to KAUST’s Sea Water Reverse Osmosis Potable Water Treatment Plant, where his team will be able to test their prototype.

When I first posted the article titled How KAUST’s Latest Seed Fund Winners Are Shaping the Future of Saudi Arabia, which started the series on research-focused KAUST entrepreneurs like Rinaldi, one of the first comments posted was “I thought you said universities are waste of time”.

I responded “Yes they are if you are an entrepreneur with a ready product and a ready market. If you are a researcher, then a research center or a university is the best place for you. BTW KAUST is more of a science and technology park and less of a University”.

Honestly, why would I want Rinaldi to drop out of his Ph.D. program? The prototype he and his team created will need to be refined before it’s ready for the market, and KAUST seems to be giving him the money, mentorship, and testing grounds he needs. He is being true to his dreams by staying in school.

Swimming Against the Tide

Above we have case studies focused on two young, male KAUST students, one who found staying in school the best investment, and one who found dropping out the best investment.

I don’t think Rinaldi, the current Ph.D. student, needed much encouragement to stay in school. Our culture assumes that smart, hard-working young men like him will stay in school once they have begun a degree program.

I do think Kassem, the drop-out, needed encouragement to choose a start-up over school, as did Abdullah. For many people, it takes encouragement to go against ideas that society has reinforced for us, like the idea that all smart, hard-working young men should get a higher education.

That is one reason you hear me encourage some young entrepreneurs to drop out of school, but not the opposite. The entrepreneurs who are best off in school are already showered in encouragement. Instead, the entrepreneurs for whom dropping out might be the better business investment are often told by their family and friends that they will ruin their lives if they leave school. They need to hear the other side of the story.

Staying True to Your Dreams

What I want, like Moizuddin said, is for entrepreneurs to be true to themselves and believe in themselves, whether that means dropping out or staying in school. I want them to make a smart business decision as to whether finishing their education or leaving school will bring them closer to their dreams.

I don’t want anyone to go to college only to get a degree or impress their family, just like I don’t want anyone to start a business only to be known as an entrepreneur or impress their friends. Either of those paths would be a waste of time.

The best path for entrepreneurial young people is that which will offer value to our society and bring each one closer to his or her dreams. That path leads toward universities for some and away from universities for others, but in the end, both paths lead to a better world for them, and for us.

Hiring an HR Manager: How to Pick the Best Manager at Every Stage of the Start-Up Life Cycle

Hiring an HR Manager: How to Pick the Best Manager at Every Stage of the Start-Up Life Cycle

Photo courtesy of Mitch Bennett.

What advice do you have for human resources managers?

What important guidelines should an HR manager follow?

 

A professional acquaintance recently asked me these questions via LinkedIn. So, I would like to use this opportunity to talk about human resources mangers in my world: the start-up environment.

Before we begin, please understand that I am not the person to talk to about what it’s like to be an HR manager or to hire an HR manager for a big corporation. I’m a start-up guy.

Here are just a few people who are much better qualified to answer questions about corporate HR:

Instead, I will look at this topic from the perspective of someone hiring for a start-up. The information in this article is based on my own experiences, both from starting my own companies and from working with others to help them start theirs.

Finding the Perfect HR Manager at Each of the 5 Stages of a Start-Up

The most important point to understand is that your start-up will need different people at different stages, as summarized below.

1. The idea stage.
This is very beginning of your journey, when your business is a dream just starting to materialize.

The talent you need: Creative and innovative people that don’t have limitations.

The HR manager you need: Yourself. At the idea stage, you’ll be the one managing your team, including any hiring needed. If you can’t manage a team, don’t a start a company.

2. The start-up stage.
Your business now legally exists. Your products and/or services are in production and a few people are buying them. This is further than many self-proclaimed entrepreneurs get.

The talent you need: People you can depend on to get the job done. Efficiency is more important than creativity at this stage.

The HR manager you need: If you are organized, disciplined, and structured, you can remain the manager at this stage. Otherwise, pick a person from your team who is and make him or her the team leader. They will now be in charge of HR. Be sure to give this newly-created manager clear timelines and milestones.

3. The growth stage.
You are on your way to establishing a successful business, but more money means more problems. As revenues, customers, and profits increase, so do the number of issues your team has to deal with on a daily basis. Be prepared for your business to double in size overnight.

The talent you need: Flexible people who are willing to try every solution. Growth stage stars will be ready to experiment with growth avenues in terms of products, services, customers, geographical areas, and so on.

The HR manager you need: If you still have less than 30 employees, you probably don’t need an HR manager yet. Again, if you’re not suited to this position, you should pick a person from your team who is and put him or her in charge.

If you have more than 30 employees, then yes, you do need an HR manager. However, hiring an HR manager from a big company, corporation, or multinational is a bad move. A traditional HR manager is used to a stable workplace with clear policies, processes, and procedures. They know how to run the show, but not how to set it up. They will feel overwhelmed in a hectic start-up environment and quit.

I speak from experience. I hired an HR manager for one of my start-ups and paid him fairly, too. He still left.

The growth stage is crazy. You need someone who’s ready to start from scratch, including figuring out how to handle unmet manpower needs, train new people, set up the corresponding legal aspects, assess personnel, and take care of just about everything else that comes up.

4. The maturity stage.
Congratulations, you made it. You now have a successful company with a niche in the market and steady customers. Sales levels are manageable, true crises are rare, and you’re no longer running on coffee and prayers.

The talent you need: Steady, disciplined people who will take care of what you already have and, when possible, help you grow it.

The HR manager you need: You obviously need a good HR manager at this stage. If possible, keep the one from your growth stage. Depending on the size of the organization, you may want to promote him or her to Director.

If you hire externally, find an experienced, stable HR manager who has worked for a corporation or multinational. The kind of person who will usually join you is an HR manager who has had it with the corporate or multinational life. They want to become a bigger wheel in a small company rather than a smaller wheel in a big company, and you can give them that experience.

5. The transformation stage.
This is the stage where you want to make a major shift: a business line change, a merger, a sellout, or an acquisition. After all, failure is refusing to change.

The talent you need: Strategic thinkers that can examine the possibilities and evaluate the options in order to come up with a solution for maximizing returns. You need analysts, strategists, lawyers, and financial experts.

The HR manager you need: Again, find a seasoned HR manager who is fed up with big corporations and let him or her be the big fish in your small pond. Hiring an HR manager who can work well with consultants is also important here, as you will need at least one strategic consultant providing an extra pair of hands and eyes as you search for a new path.

I hope you have found this article helpful, whether you’re an entrepreneur or an HR manager considering your options.

If you have any topics you would like me to cover on future blog posts, or if you disagree and want to speak your mind, please leave a comment below.

An International Strategist’s Perspective on Dreaming Big

How Getting Rejected From Every University in Saudi Arabia Helped Me Launch a 5-Million Dollar Business

Photo courtesy of the USDA.

Photo courtesy of the USDA.

In the nineties, I was rejected from every university in Saudi Arabia. It was one of the best things that ever happened to me. That experience taught me that failure does not mean what most people, maybe even you, think it means.

Today, I encourage Saudis to drop out of school, abandon their family businesses, and quit their jobs if it helps them get serious about entrepreneurship. I do this knowing very well that there is a serious chance their new start-ups or ventures will fail, and that this failure is exactly what could make them successful.

If you want to learn my definition of failure, and find out how getting rejected from every university in Saudi Arabia helped me get to where I am today, please keep reading this article.

The First Root of Failure: The Failure to Dream

To better understand failure, look at the problems we are having with our economy. The real issue is not just a shortage of jobs or limited circulation of cash. What is really holding our economy back is the fear of failure. People are very scared of being judged as unsuccessful.

Because of the fear of failure, we Saudis stopped dreaming. When we stopped dreaming, we stopped innovating. And when we stopped innovating, our economy dried up. We traded hope for safety. Because we gave away our power, the same millionaire families, now billionaires, have controlled our economy since the 70s.

But the future of our economy depends on our ability to innovate. Once we get enough people dreaming again, their dreams will grow into new businesses, these new businesses will create new jobs, and we will build the entrepreneurial environment this country needs.

The first cause of failure we Saudis need to overcome is the failure to dream.

The Second Root of Failure: The Failure to Begin

Many people never start working toward their dreams because they think these dreams are impossible. These are the people who say there will never be a billion-dollar Saudi start-up. But before you join them in calling big dreams impossible, let me remind you of the story of Mohammed Bin Laden.

Mohammed bin Laden was born in 1908 on the coast of south Yemen. He grew up poor, uneducated, and illiterate. His father died when he was a child. When Mohammed bin Laden first came to Jeddah, he worked as a porter. Then, in the 1930s, when he was in his twenties, he started his own construction company. He earned his success by bidding low on contracts and working reliably. You know the rest of the story. His company helped build the Kingdom as it stands today.

So, what if you woke up tomorrow in the same situation Mohammed bin Laden was in when he came here? If you woke up without your house, without your money, without your university degree, and without your family, would your risk of failure really be higher than it is now?

If you understand what failure truly is, you will see that it does not matter. Beginning to work toward what you love, no matter what your situation, can only bring you closer to success.

So, the second cause of failure we Saudis need to overcome is the failure to begin working toward “impossible” dreams.

The Third Root of Failure: The Failure to Make Mistakes

It is resistance to change that is holding our economy and our future entrepreneurs back. Changing means taking risks, and taking risks means making mistakes. I know how painful that can be, but I also know much it helped me.

I moved closer to success in 1994, when every university in Saudi Arabia, and even many in other countries, rejected me. The reason I moved closer to success is that I changed my strategy. I began to frame my rejection letters, not because I was proud of my situation, but because something had to keep me motivated. In 1996, I wrote a letter to the rector of King Fahd University of Petroleum and Minerals pleading to be allowed to go to classes, not even as a full-time student, but just as a learner. Although I had done nothing to earn it, he responded by giving me a full scholarship.

I moved closer to success in 2004, when I launched my own start-up with only 30,000 riyals in the bank, naive and ready to change my life. And I moved closer to success in 2011, when I attended the G20 Young Entrepreneurs Summit, ready to change my thinking by learning more about entrepreneurship from a global prospective.

There is nothing special about me that you, the future entrepreneur reading this right now, do not have. I have a willingness to fail and keep trying, but you can choose to adopt this attitude, too.

You can decide to start early and make as many useful mistakes as you can. The younger you are, the more you will learn from your mistakes. As you get older, your life will weigh heavier around you, and your mistakes will hurt more. Soon, you will be 40 or 50, and although it is never too late to start, you will find yourself thinking that it is too late for you to change. But the truth is that as long as you keep making mistakes, you will keep moving closer to success.

The third cause of failure we Saudis need to overcome is the failure to make mistakes.

The Core: What Failure Truly Means

Despite what society may tell you, failure is not falling into poverty, dropping out of school, angering your family, or even shutting down your business. These old ideas of failure are what is holding our economy back. To change our economy, we need innovation. To start innovating, we need to go back to dreaming.

So, what is failure?

Failure is refusing to change.

The rich businessman who is sitting in his office, doing work he does not love because he is afraid to change his life, he is the failure. The student attending class after class, studying something she does not like; the young man working in his family business without room for innovation; and the employee sitting down again to do the same routine job are failing themselves.

The young innovator who is broke, but always learning more about what he loves, is succeeding. Because as long as he keeps working to improve himself and change the economy for the better, he cannot fail. As soon as he starts working toward his dream, he is succeeding.

So, whatever your entrepreneurial dream is, start working toward it today. Because as long as you keep learning from your mistakes and improving yourself, you will never fail.

Readers: what is your entrepreneurial dream? Post in the comments section below and share it with the world.

English Translation of Osama Natto’s Saudipreneurship Interview

Last month, I was featured in Saudipreneurship, a free online magazine that aims to promote entrepreneurship among Saudis. This publication was launched right here in Saudi Arabia by Tariq Buhilaigah and Yousuf Jamjoom.

Several people requested an English translation of my interview. I am happy to offer it today:

Getting to Know Osama Natto

Meet Osama Bakur Natto: a business architect, entrepreneur, and man with a mission. He wants to build the new Saudi economy, with the intellectual force of the youth as its foundation. Three core aims encapsulate his vision:

  1. To create a billion-dollar start-up
  2. To build ten Saudi brands with international reach
  3. To foster 100 young male and female entrepreneurs in Saudi Arabia

As well as working as a partner and board member at a number of companies, Osama collaborates continuously with his friends to launch fresh ventures—they establish a new business every year and a half. Projects have included App51, for mobile applications, and Shirkat Talbiat Al-Talabāt Al-Saudiyya, literally the “Saudi Order Fulfillment Company,” an infrastructure platform for electronic commerce in Saudi Arabia.

As a representative of Saudi entrepreneurs, Osama has rubbed shoulders with the world’s twenty biggest economies at three separate G20 summits. He attended in France in 2011, in Mexico in 2012, and in Russia in 2013, and is expected to represent the Kingdom at the 2014 summit in Australia as well.

Osama is currently heading a business accelerator program at Umm Al-Qura University, Makkah, aimed at creating bright thinkers who will create their own companies. He also represents the voice of young entrepreneurs at the Makkah Techno Valley Company, the entity responsible for building an SR2B science and technology park in Makkah.

The Path

  • Born in Makkah in the year 1977 AD / 1397 Hijri
  • Studied in Makkah
  • Academic results very good over 12 years of study
  • 1994 – 1995 worked for his father in an equipment shop
  • Salary of 2,000 riyals for a period of about two years
  • Graduated from King Fahd University of Petroleum and Minerals, with honors
  • Decided to spend 5 years at one company
  • Worked as a systems analyst at Procter & Gamble in Jeddah
  • 1999 Was sent to their European headquarters
  • 2001 Was chosen to start establishing the company in Dubai
  • 2003 Moved from Dubai to Jeddah
  • 2005 Left the company to devote himself to establishing his own business in Jeddah

As an innovator and pioneer, what are some of the most difficult moments you’ve been through on your journey—or that could possibly confront one of us?

You’ll face numerous hardships and difficulties. The most important thing is that you learn how to deal with them on an ongoing basis. Some of the toughest will be:

  • A frequent lack of cash for personal expenses
  • Your business getting close to bankruptcy and closure—more than once
  • Disturbances in the team leading to a decline in output and forcing you to do the work yourself so that client projects are kept on course
  • Complete disregard for your dreams and goals by the majority of those around you

Time is one factor that is critical to success. Osama, how you do you divide your time between new projects and the day-to-day hustle and bustle of your work?

90% of all that I do or participate in is scheduled in advance. I draw up a general schedule early in the year, and from there I start to plan on a quarterly and weekly basis. The people around me often grumble because they have to wait weeks for an appointment!

One day per week:

✔ In the office for meetings with project managers and leaders

Meeting entrepreneurs and offering advice

Half an hour every day:

✔ Social networking

One or two hours every day:

E-mails

✔ Creating content for my website, osamanatto.com

One day per month:

✔ Participating in an entrepreneurship-related gathering or other function

Every 6 months:

✔ A week’s holiday where I’m completely disconnected from the rest of the world on an island, at a faraway resort, or on a long cruise

One of Osama’s dreams is the advancement of today’s youth—that’s why he created the slogan “Generating Tomorrow’s Billionaires Today.” Osama, you get to look over plenty of new projects. Do the projects you encounter give you hope that this dream can be achieved?

What I work on every day… This dream is still in the making, because we’re lacking the most important elements needed to realize it:

  • An effective, encouraging, and stimulating entrepreneurial environment;
  • A legislative and legal environment that supports entrepreneurship;
  • A funding and financial environment that serves entrepreneurship;
  • Infrastructure that can keep pace with the types of entrepreneurial projects occurring;
  • A society that is receptive to entrepreneurship and welcomes the idea of both male and female entrepreneurs; and
  • Local skills that can keep pace with technological and commercial developments.

I decided, from 2011 onwards, that I would allot a big portion of my time to addressing these essential ‘ingredients,’ and I began working with the relevant authorities to bring them about. Without these ingredients, the dream cannot be achieved—regardless of the entrepreneurs’ efforts or the huge amounts of money that are pumped into entrepreneurship by supporting organizations.

With regard to the projects I see almost daily, 95% lack originality and creativity. They’re duplicates of previous concepts; the idea is ‘spent.’ The owners of these ideas could save themselves and me a good deal of time by doing a quick search on Google or on project platforms like Kickstarter.

You moved around a lot between different companies and places of work. Does this help young people to develop their entrepreneurial character in preparation for beginning their own projects?

Variety in the world of work is absolutely necessary; it expands your horizons.

Let’s say we want to establish a venture in Saudi Arabia. What are the basics?

The basics are not tied to one particular country. All budding entrepreneurs should study the laws and legislation of other countries as well as their own. Aside from that, here’s a quick summary:

  • Come up with a creative idea: one that solves a real problem, will return a profit to the owner, and be beneficial to society
  • Convert the idea into a variety of products and services. Prices should vary, should make the product easy to adapt, and should return a profit
  • Form a customer base from segments of the population with a spending power and size that makes them financially attractive
  • Form a commercial, organizational, and financial growth plan that is sustainable—that is, continuously expanding and resistant to external factors
  • Establish a team whose personal aims align with those of the company founder
  • Bring a culture of investment to your financial management. Manage financial resources effectively, in a way that focuses on the availability of cash and the growth of the company’s market value

What is a book that has inspired you and that you would recommend?

How to Make Big Money In Your Own Small Business by Jeffrey J. Fox. This was the first book I read from cover to cover in one sitting, and was the first book I bought after I decided to start my own business.

If you would like to read this interview in Arabic, please click here to view it on Issuu. If you would rather read from your Android phone, try downloading the free Issuu app.

Saudi Entrepreneurs: Dream Big or Die Small

Dream Big or Die Small

Photograph courtesy of Bob Bob.

When you come into my office, I ask you how you are going to make a billion dollars. You don’t like the question. You tell me you want to start small with your business and see how things go. Someday, you say, you will be selling in New York and Tokyo, but for now, you just want to get the ball rolling in Saudi Arabia.

But your small thinking keeps you small.

To succeed as an entrepreneur, you need a dream big enough to carry you above the day-to-day grind of running a business. If you think small, your energy will get sucked into everyday operations, and you will be too tired to think about scalability. When you finally find time to think about scaling up, you will be in too deep to update your business model, and you will not have the resources set aside to do so.

If you really want your business to make it to New York or Tokyo, let me share how you can start preparing for it right now.

The Secret to Becoming the Next Mark Zuckerberg

The key to growing beyond an ordinary small business and creating the next Facebook or Apple is to have a scalable business model. With a scalable business model, each extra dollar is cheaper to earn than the last, and growth does not rely on hiring more employees. There is no such thing as an infinitely scalable business model, but some business models allow for much more growth than others.

With my involvement in Destination Jeddah’s Enlighten and Mentor program, the Makkah Business Accelerator Program, and similar initiatives, I have seen more and more entrepreneurs entering the Saudi market every day, but most of you do not have a scalable business model. Not all of the programs and training centers that are supposed to be supporting you are teaching you this very important concept.

As one of the moderators of Startup Weekend last year, I decided I would just focus on scalability when speaking to the entrepreneurial teams. Not one of them had a scalable business model. When I talked to them and showed them how to scale up through licensing and other strategies, they told me they just wanted to start small and then grow. (By the way, at the time of writing, I haven’t heard of any of the Startup Weekend teams actually launching a business. If you know of any Saudi participants who have done so, please let me know in the comments section below, or tweet me.)

I understand. I thought the same way when I was a new entrepreneur. My first company, launched in 2004, is now closed, and the second one has required a huge strategy change to scale up. Multiplying the number of transactions you are making by 1,000 does not happen on its own.

The sad thing is that many of the businesses we have in Saudi Arabia could scale up beautifully. The problem is not a shortage of good products and services. The problem is a shortage of dreamers.

The Treasure Hidden in Plain Sight

Many Saudi companies have the potential to scale up successfully, but are not taking the opportunity. I know a publication that has an excellent brand and improvement record, and they could spread to every city in the world. It took this publication 5 years to launch in a second city, and I think it will take them another 5 years to launch in a third. But if they focused on scalability and had the right partners, they could launch in a new city every 3 months.

We also have excellent fashion designers in Saudi Arabia, but they are staying at the boutique or multi-branch level. They are not thinking about how to become the next Armani or Calvin Klein, or how to make sure their designs reach the U.S.

A few entrepreneurs are starting to wake up to this opportunity. Lately, I have had more young entrepreneurs making appointments with me, coming to my office, and discussing how to make their business ideas scalable. As with everything else, it will take time for people to adopt this mindset. As entrepreneurship becomes a bigger part of Saudi life, people will start to realize that they need to consider scalability from day one. Then we will see entrepreneurs asking themselves whether they have a million-riyal business idea, a 10-million riyal business idea, or a billion-dollar business idea from the beginning.

Until then, I will keep advocating for the importance of scalability in local magazines, on my website, during speeches, and in YouTube videos. I believe that once entrepreneurs like you understand the importance of scalability, our economy will transform.

Aiming for the Moon

Once you have a scalable business model, you will be able to see your path to a billion dollars, but many other people in your life will not. They will try to push you back into the mindset of starting small and scaling up someday. Turn it around and tell them you want to start with a billion-dollar idea and scale it down to fit the resources you already have.

There will always be people who say you are aiming too high. When you hear that, remember what W. Clement Stone said: Always aim for the moon. Even if you miss, you’ll land among the stars.

Looking for feedback on your business model?

Please send me your business plan or schedule an appointment with me through OsamaNatto.com/contact so I can help you create your billion-dollar business model.

 

Osama Natto Interviewed for Saudipreneurship Magazine

I have been featured in the latest issue of Saudipreneurship, a free online magazine aimed at promoting entrepreneurship among Saudis.

Here are just a few pieces of information I shared in my interview with magazine co-founder Yousuf Jamjoom:

The business book that inspired me to start my own company after reading it from cover to cover in a single sitting
The big time commitment I made in 2011 that has shaped my future (and many others’ lives) since
How crazy my schedule really is

The interview is entirely in Arabic. To read it for yourself, just click here to go to Issuu. If you prefer to read from your Android phone, you can also download the free Issuu app.

 

 

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