Four Hacks To Build A Fail-Proof Business In The UAE
Whether you intend to start out fresh in the UAE, or plan to expand to additional territories in the Middle East, here are a few things you can do differently to not just survive but thrive in the industry.
The UAE is currently an incredibly attractive base for entrepreneurs to launch and run their businesses from. Getting ranked first globally in the Global Entrepreneurship Monitor's Global Entrepreneurship Index for 2022 reflects how startup-friendly the nation is today. Besides, Dubai is attracting more startups with incentives such as a golden card permanent residency, a five-year visa for entrepreneurs, among others.
Whether you intend to start out fresh in the UAE, or plan to expand to additional territories in the Middle East, here are a few things we can do differently to not just survive but thrive in the industry:
1. Focus on customer centricity The secret sauce to success in the UAE is to drive an insanely customer-centric culture. In a brief period, the COVID-19 pandemic has changed how we define customer experience. The new customer represents a paradigm shift in a post-pandemic world. Customer loyalty is weak- 74% of customers can switch brands if the purchasing process is too difficult for them, while 32% of customers break up with their favorite brand after one poor customer experience.
Today, businesses are willing to change everything about how they deliver to fit their customer's evolving needs. Being customer-centric goes beyond offering an excellent product. We must actively listen to their needs to provide flexibility and convenience. The market will talk to you about what they want, and the kind of changes they expect. I can personally tell you that the business model of my company, Selfdrive, was quite different when it started in 2011. Customers change their mind often and offering extreme flexibility is key here. In 2017, we rebuilt the entire solution before going live in the UAE, and we let the market decide the kind of products and services they want. We realized knowing more about our customers helped us scale in a seemingly saturated market.
2. Find a scalable niche The UAE has been a magnet for entrepreneurs, offering a healthy ecosystem for startups. Dubai is ripe for the kind of boom Silicon Valley witnessed, and it is attracting the best startups globally. At the same time, there is no denying that competition is stiff. To ensure that you unlock your potential in this habitat, find a niche that is scalable. It may sound counter-intuitive but make sure you can envision the business at scale when you choose your niche.
The car rental market had many big players in the market when Selfdrive was launched in the UAE. However, we identified a virgin landscape within the industry that comprised of franchisee-based car rentals, leasing companies, and dealer networks. We decided to focus on providing on-demand mobility customers who needed mobility from one-month to 12-months, while other providers focused either on daily/weekly rentals, or directly leased brand new vehicles. We did a market study and found that the monthly-lease or monthly subscription-based model was an untouched territory. We also decided to micro-lease after we recognized its potential to scale. This service was introduced for people who have just arrived in the UAE, those who are not likely to stay long in the country, or for those who simply do not wish to lock down money in buying a car, or take a long-term car loan. Selfdrive was the first to launch this product in the market.
3. Be agile, always If you consider the automotive industry, factors like on-demand mobility, digitization, connectivity, and electrification are only a few of the changes that triggered disruption– and this was before the pandemic. The biggest disruptor, COVID-19, has been a wake-up call for businesses that ignored changes in the landscape. Marketers who previously catered to the digital native generation found that they were speaking to a broad range of customers who became tech-savvy overnight.
On the other hand, who could have predicted a shortage of new cars in the UAE a few years ago? Currently, there are not enough cars to meet the demand surge, and deliveries are taking up to three months. Times have changed– one risk after another keeps coming up in the new normal. If you treat failure as an inevitable outcome of experimentation, it provides a learning opportunity, and it also enables agility. Navigating through an era of disruption requires entrepreneurs to innovate rapidly, and work on an agile methodology at any given time.
4. Think local A distinct characteristic of the UAE is its transient population. An average of 259 migrants are expected to enter the country per day, according to Country Meters– that's about 10 people walking into the country in an hour. The transience creates plenty of opportunities to foster local development across sectors like housing, education, and mobility, among many others. To have influence in a crowded world, an entrepreneur needs to disrupt the industry and solve a problem. For instance, we are seeing a clear shift from a car-ownership model to on-demand mobility among customers here. However, this was not the case a few years ago.
Selfdrive identified and addressed two key issues in the mobility space. Firstly, car dealers and manufacturers in the region are left with a large inventory of brand new, unsold cars that pile up in their yards. This is because fleet services purchase specific car models in massive quantities. As a result, other car models had no takers. The dealers had no platform to push out leftover cars to rent it, lease it, or gain revenue out of it. Secondly, customers could access daily/ weekly car rentals, or lease a car for a longer lock-in period. No one offered flexibility in the form of a digital, subscription-based, on-demand mobility service. We hosted the new, unsold cars on our platform, and offered customized solutions on our platform with ample flexibility. It changed the mobility market drastically and currently; we manage about 3,000 cars on our platform in the UAE alone. It is essential for startups to understand that the market landscape in the UAE is quite different from any other region. If you have the right product and if you have figured that it is a requirement in the region, you will find opportunities to scale and thrive.