Entrepreneurs as an Asset

[Music] okay I'm conscious of the clock we've got 10 minutes I want to get through this and we're going to be talking about entrepreneurship as an asset with uh two of perhaps the leading voices in the space uh on my left a man who doesn't need much introduction the CEO of General Atlantic one of the largest P firms in the world and then Michael to his left who is the CEO of property finder which is one of the fastest growing companies in this region uh so it's a marriage of the two so to speak a partnership uh which uh lends itself nicely to the theme of our panel today Bill let me just start off with you um you know you think about a PE firm but then also uh entrepreneurship how how did a a company and a firm like General Atlantic find itself looking at opportunities at such a Grassroots level well we've been investing in entrepreneurial growth companies for over 40 years and we've been doing it all over the world um you India China southeast Asia Latin America and of course the US and Europe but uh we've been very excited to to uh expand our presence here in the Middle East and uh begin trying to identify entrepreneurial growth companies here we're very fortunate to be investors in Michael's company property finder but uh for me it's it's property finder is a great example of a you know a worldclass entrepreneurial company that is you know really um capitalizing on the growth and economic dynamism of the region and uh you know we it's why we want to be here because we think there'll be more of those opportunities has the mission of the company of the of the fund evolved since the early days in terms of which part of the cycle you're looking to invest in we we've always been focused on growth equity and trying to identify companies that are just past the Venture Capital Stage and really trying to scale up uh what we've done was our start was in technology investing just in the US and we've actually globalized that by saying we see entrepreneurs all over the world who are capitalizing on opportunities and we still see a lot of opportunity in technology but also in healthcare and consumer markets Michael I'm sure many people here would love to hear at the story of how you came up with the idea of property finder you and I were just speaking now uh behind the scenes and you're telling me that you weren't from the region you aren't from the region but you identified an opportunity in the region so just give us a sense of of the story behind the company sure so I came for the first time in the UAE in 2004 I grew up in a small city called Geneva in Switzerland and uh my uncle had a uh won a construction project to do the piling of the Palm Island so when I came here he took me on this middle the middle of the Palm Island and told me look there's going to be houses here in the middle of the ocean and I said wow that sounds absolutely crazy we don't have these kind of projects in in Europe and uh I did a little bit of research on where were all these properties going to be resold and rented out and nobody was really focused ing on that part on the advertising of the real estate market and uh I experienced myself a pretty painful moment when I was trying myself to rent an apartment and I had to go through a classified newspaper I think we all remember or those that are old enough remember how um unfriendly as a user experience of a of a paper classified and so that's when I said well there's got to be a better way to organize the information and uh let let let's start property finder which year was that so 2005 we started in the print so we because internet penetration was below 40% so we just couldn't rely fully online we knew that we were going to end up as being a portal an online portal but we had to start with uh with with print and competing against the major newspaper which was uh golf news yeah so you've been through many cycles over here in Dubai of course and uh sorry the UAE uh many booms and bust as we were speaking about in the real estate market but when you were thinking about your next leg of growth what sort of characteristics were you looking for in in in a partnership in a partnership um so um there's a couple of things that we look at when you try to raise Capital first of all you want a partner that understands your sector classified is is quite a particular sector and general Atlantic have invested in a lot of classified business across the globe um you want a partner that also has appetite for the region and bill has been coming to the region for many many years and and has been a big believer in in what is happening here way before you know what we are today um and and then two things I think that really kind of distinguishes uh General Atlantic from from other investors of what they really brought to property finder is one is a great reputation and um when you're building a company that's what you're looking for you're looking for an external validation of what you're doing so you want somebody that has a great name and a great reputation uh and that enables you to attract talent and then second um um I lost my thought that's a good enough reason if you remember we can come back to but let me just put the question to you Bill when you're looking at companies to invest in what are the characteristics that that you that that draw you in well well it always starts with a great entrepeneur like Michael and and it it we have a mutual admiration of society here because we were very fortunate to be investors in uh property finder and finding a great UNC Michael but we we like to talk about three things that we look for in in a growth Equity investment uh Market model and uh and management so the the 3M and you know uh first is it is it a good market and a growing market and clearly uh you know the Middle East was growing Dubai was growing so we saw a terrific Market opportunity second business model uh we we we really understood that the classified business model could be one that generates lots of recurring revenue and high profit margins over time once it reach scales so we we really like the business model and we had an exceptional leader in Michael or or management uh the final L and and you know Michael's done a wonderful job building out his management team over the years years as as he scaled the company yeah and of course you've been involved in the company since 2018 as well yes so I guess it comes back to what you were just saying about the company Michael himself but the draw to get involved back then was both the person the company the business model and the growth opportunities that the region offered I I think we were we were fortunate that we saw that the region had tremendous potential uh to to grow and uh and that and that great uh and that human capital was developing and it it was people coming to the region to build businesses it was Talent who might from the region who might have been educated abroad choosing to come back and start companies and and that those were the telltale signs for us that something special was beginning to happen in the Middle East and I'm happy to say it's continued to play out from there yeah Michael uh capital is is often the way to keep your business growing and yet capital is increasingly difficult to come by especially in a a higher interest rate environment uh is it an impediment uh that to further push forward with growth plans companies tend to be so reliant on the ability to attract further Capital it's a great question I think a lot of entrepreneurs um mistakenly believe that success is about raising Capital yes it is important to raise capital and at some point you you are going to need that Firepower in order to scale but I would encourage entrepreneurs to focus a lot more on product Market fit and growing profitably I think right now the name of the game is growing a profitable business we've seen that the growth at all cost is not something that um public investors reward well anymore and so growing um financially and profitably is absolutely important yeah and from your perspective bill as well I mean how do you think about the allocation of capital in in such an environment where again there's more competition and perhaps everyone chasing the few real opportunities that exist out there it's a competitive market um you know for the great companies like property funder you know it's always going to be uh going to be a competition but uh but but I think um you know what we've learned is that if you can really demonstrate your ability to add value to the company and add value to the company building process that Michael's been working hard at for over a decade uh that you can differentiate yourself and distinguish yourself from just being a provider of money so to us that that that company building capability that value ad is a source of of our investment alpha and really why we hopefully are selected by the higher quality entrepreneurs yeah I think what what GA has and what I wanted to say earlier that came back to my mind is one of the key attributes of General Atlantic is that they are known to be founder friendly and in this space of private Equity um it's not a given right you have some a little bit more aggressive investors and uh what you want as a Founder is somebody that is going to be respectful of your vision and respectful of your own timing and um you know I can only say great things about our partnership over the last 5 years until today even as you know um most private Equity would be looking to exit uh Jenner Atlantic is doing that in such a Grace way um and that dialogue is really really helpful and I think that's what entrepreneurs who have great company and have the choice to choose which investor they're going to go with that are this is something that's going to matter it's a really interesting point you raise about the sort of longevity of the partnership because if you look at the region many of the plans that are put in place are long-term Visions these are long-term plans that are going to take time to play out we talk about the diversification diversification drives this isn't going to happen overnight so from your perspective Bill how important is it also to have that sort of understanding that um look patience is required at a partnership level I I think it's especially true here in this region that you have to have the staying power and the long-term perspective uh to basically think about a 5 to 8y year if not longer holding period yeah uh when you're in markets that are developing like the Middle East again it's it's not a one two or threee investment and and Company building takes time uh these markets unfold differently and and I think it's it's been it's been helpful to us that we've got investors who understand that we want to be long duration investors and and uh and then if it if it takes Michael longer uh to build the business with quality I love the way he talked about profitable growth versus growth at all costs uh you know that again that can take more time yeah um Michael I I thought it was interesting you said when you uh founded the company in 2005 there was very limited internet access that makes me feel like a dinosaur because I remember those days quite well but if you look at where we are today where do you see the uh the the latest Frontiers for disruption and not not just specifically to property finder but just in the ecosystem I'm guessing you're going to say artificial intelligence but I'll let you say it no look I'm focused on um consumer Tech businesses right and I think artificial intelligence comes in those consumer Tech to enhance them and make them more profitable I don't think about uh AI as uh technology that you sell in itself uh uh but what I see in the region is very exciting I mean we have one of the youngest region if you look at the demographic and the pyramids of the demographic are absolutely exciting and what is ahead of us for the next decade we were discussing this backstage I mean the next 10 to 20 years in this part of the world is going to be phenomenal so any entrepreneur that has an idea that can enhance the day-to-day life of consumers out there uh should come here and and and build a business because the framework is there the demand is there the stability is here um and it's you know it's been a great uh a great journey I just picking up what Michael said uh I think people don't fully appreciate how fast the region is growing outside of the energy economy and while it might be posting a 4% growth rate going forward if you take out energy you're looking at GDP per capita probably growing by 50% in the next 5 to seven years a trillion dollars of additional GDP that's pretty darn exciting and you combine that with as Michael pointed out a very young demographic looks a lot like India people talk about India having a great demographic but it's the same here uh that combination of young demographic High GDP growth per capita outside of energy uh in in very high digital penetration 80 90% of the people have smartphones so it's a very digitally enabled Society all that together really is a terrific recipe for entrepreneurship new companies and and and economic dynamism Michael final question to you given uh your success story uh and long may it continue for for you uh what advice would you give to entrepreneurs in the room anyone who's watching this panel about their own perspective growth journey I always advise entrepreneur to ensure that what they're working on is really uh something that they do out of passion because the journey is likely to be a lot longer than what they plan I didn't think that I would still be running property finder 20 years later I didn't think the company would still exist probably that long um and and it's probably going to be here for a while and so you got to be really passionate about what you do and I think that applies to any job I think it applies to everything love what you do there that's the takeway from our panel thank you very much everybody thank you thank you very much [Music]