A statistic somewhere states that 9 out of 10 businesses fail. Not sure if this is true but it’s the few that are ultra successful that drive most of us “other” entrepreneurs. For every Facebook, YouTube, Google there are millions that never quite make it.
Samih Toukan was fortunate to be on the side of the businesses that did “make it”.
He co-founded Maktoob.com which started as email for the Arab world in 1998. It grew to have a few million users and was eventually bought out by the US giant Yahoo for $175 million.
One of the lessons you can take away from this interview with Samih Toukan is that Maktoob used “language arbitrage” to get their initial business off the ground. In finance, stock traders use what is known as “arbitrage” or an inefficiency in the marketplace to make money. In the internet world you can use “language arbitrage” to get your business off the ground. Ideas don’t travel to the whole world at the same rate, as users in one language can’t get the idea which is promoted in a different language. Large companies such as Google, Groupon, Yahoo, Facebook, Twitter might not be able to reach your market or understand your market as well as you do.
So you can take existing “English” ideas and put them in your language – or convert good Arab ideas to the Hindi speaking world for instance. The internet was initially dominated by the American entrepreneurs. Now though more local entrepreneurs are going to come out and play. As the number of Arab users grows online for instance, the Arab niche becomes interesting enough for Arab entrepreneurs to exploit. Samih and his team started to exploit the Arab internet market from 1998 and solved all sorts of “arab” specific problems in order to grow the company – for instance creating a java based virtual keyboard to help typing in the Arabic script.
In the same way you can also start to exploit “language arbitrage”.
Joseph Jambu, a Kenyan living in Dubai, used ShopMarkaz (disclosure: my own company) to create www.jambustore.com. He found that many Kenyans wanted access to products that were available in Dubai but not their own countries. Over the next few months/years he will have to sort all sorts of “Kenyan” specific problems in order to get his company to work – including providing the services in Swahili. Amazon.com is known in the United States and a lot of the world, but if Joseph markets better to the Kenyan niche in which Amazon doesn’t quite have the interest in, than for Joseph it can be a huge winner.
Any new business has a multitude of problems. Samih and his team went through their fair share. And in the end (hint there is no “end” for entrepreneurs) they were able to sell off for $175 million.
When you are getting your business off the ground it seems that “they” got lucky and overnight sold their company for $175 million. But when you talk to most entrepreneurs you will find the years of sweat put in and many “will we make it?” moments before they finally “make it”. If you are not living in Silicon Valley and are wondering if it is possible for you to get a good exit, than the answer is yes. That pioneers like Samih and opening the doors for your types of start ups. To give the next generation of non-US based entrepreneurs a precedent that big acquisitions outside the US are possible (maktoob was based primarily in Amman, Jordan).
And as Robert Kiyosaki says, if only 1 in 10 businesses are successful than go out and start 20 businesses so you know that at least 2 will be successful.