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COVER STORY

Great business ideas often develop organically. Meet four entrepreneurs who found a niche in the market, proving that even the most successful ventures are not always based on calculated research, but rather on following your instincts and being in tune with your surroundings.

BY REHAB EL-BAKRY

Dina Abdel Wahab sees potential where others don’t. When she failed to find preschool for her son with special needs that would properly develop his cognitive and social skills, she started her own. Now Baby Academy is growing up, and she is looking to take its specialized teaching techniques to new markets.

Motherhood has a funny way of shaping career paths. Dina Abdel Wahab graduated from the political science department at the American University in Cairo, and seemed on the fast track to a career in international development. But after the birth of her first child in 1997, she found herself moving in a very different direction. Her son, Ali, was born with Down’s syndrome.

Abdel Wahab quickly learned the challenges this presented, particularly society’s misperceptions about Ali’s ability to learn and develop. “It was very difficult to find people who knew how to deal with his development here in Egypt,” she says. “So I began traveling to the US every six months so that we could assess his case and I [enrolled] in different programs to learn how to work with him.”

She was encouraged to learn that children with Down’s syndrome show remarkable advancements when given a chance to develop their cognitive skills while interacting with other children. “Ali was growing up and he needed to become more independent, and needed to start playing with other children on a regular basis. So I started looking for a preschool, and this was when the big surprise came.”

Abdel Wahab was shocked to realize that preschools, by western standards, simply didn’t exist in Egypt. Most of them were simply day-care services, where children were properly cared for, loved, fed and safe – but didn’t actually learn anything. “I used to work for NGOs working on early childhood education, so I was familiar with the type of social and [cognitive] development that children were supposed to learn in preschool. I had always thought the basic programs I encountered while working in development in Upper Egypt and in the refugee camps in Jordan and Lebanon were simply due to the fact that they were operating in developing areas. I was surprised to learn that this was also the norm in preschools in [affluent] areas of Cairo.”

The schools Abdel Wahab approached refused outright to accept her son when they learned he had Down’s syndrome. “People wouldn’t assess him first and then decide whether or not he could enroll in mainstream schools, which is what happens internationally; they just rejected him because of genes,” she recalls. “They would ask things like ‘is he safe to be around other children?’ or ‘is he violent?’”

Eventually, she found a preschool managed by a Swiss woman who was more than happy to take in Ali, noting that in her native Switzerland, they believed in inclusion of children with special needs. But while the teachers provided Ali with exceptional care, at times spoiling him, Abdel Wahab grew increasingly uncomfortable that they were not making any attempt to develop his skills. “At home, he would hold his own spoon and eat all by himself, but in the preschool, they had someone feed him. They didn’t realize that he was capable of coloring and doing puzzles on his own,” she says.

When she brought up the matter with his teachers, she felt they treated her like a woman who was refusing to come to terms with the condition of her child; that she was trying to push him too hard to become something he would never become. “I just wanted him to live up to his potential,” she insists.

As she struggled to find a solution, the idea of Baby Academy began to take shape. “I had this idea of establishing my own preschool where kids were not just taken care of, but learned new information and skills; where every child had the opportunity to learn and develop at his or her own pace regardless if they had special needs or if they were gifted,” she explains.

Abdel Wahab sketched out a plan for a preschool with a long-time friend who agreed to help finance the project. She traveled to the US to purchase the latest curriculum based on the child-centered learning system by which teachers adapt their teaching style, material and techniques to the learning curve of each child, rather than having the child adjust to the pace or technique of the teacher. “We had decided not to spare any cost. We wanted Baby Academy to be on par with preschools in the West.”

The project quickly ran into roadblocks. The first came when Abdel Wahab tried explaining her vision to the various officials responsible for issuing the permits. Preschools, she learned, did not fall under the umbrella of the Ministry of Education, but rather the Ministry of Social Affairs (now the Ministry of Social Solidarity). “The first problem is that you are in the same category as orphanages. You don’t have a law that regulates preschools. So when you’re talking about early childhood development, or preschool teachers... government employees have no idea what you’re talking about.”

Upon applying at the Ministry of Social Affairs, a representative gave her a checklist of steps to complete before applying for a preschool permit. “It took me nine months of going back and forth,” groans Abdel Wahab. “First of all, the ministry had no guidelines for the standards of the preschool. To me, that was not the problem because I intended to have the highest standards in everything. We then spent months with [the representative, who was] trying to argue that the location was too big for a preschool and that I was not going to make any money. She suggested that I should turn it into a restaurant. And when I explained to her that I had a feasibility study and that if I lost money, then it was my problem, her reaction was, if I don’t care about the money, then I should turn it into an orphanage. At one point, she even accused me that this was a money laundering scheme.”

When the permit was finally secured, Abdel Wahab had another concern: would her project succeed? Even as Baby Academy opened its first branch in Heliopolis in May 2000, she admits that she was initially worried that parents might not fully understand the spirit and thought process behind the project.

Apparently they did. In fact, the venture proved so successful that within two years, and despite some of the highest enrollment fees in the market, she was looking to expand, first to Mohandiseen, then later to Nasr City.

Baby Academy’s success has brought new challenges. Abdel Wahab has discovered a shortage of qualified teachers. In recruiting, she has faced two options: either hire experienced teachers and try to re-educate them to adopt the child-centered learning system, or hire fresh grads and train them in-house. She opted for the latter, believing that getting people to change the way they do things is much more difficult than trying to teach them from scratch. “Since the preschool offers programs in English, French and German, I decided to hire fresh grads, with excellent language skills and good university degrees, and teach them everything myself,” she says.

Abdel Wahab’s training covers everything from how to use the different materials in the class, to how to tailor teaching techniques to each child’s individual needs, to the nuances of child psychology. “You can’t just learn [these] things theoretically. It’s like being a doctor, you actually have to practice in a [classroom setting]. All this takes time.” One of the things that is keeping Abdel Wahab from expanding even further, she elaborates, is the lack of suitably qualified teachers available.

And to make matters worse, once the teachers are trained, other schools swoop in. Baby Academy is a gold mine of trained staff, she says. “We are the highest paying preschool, but now international schools are recruiting my teachers. They offer them more pay and benefits like a 50-percent discount if they enroll their kids in that school.”

The shortage of quality teachers has prompted Abdel Wahab, along with an institute in the UK and another in Dubai, to explore the possibility of creating a training center for Baby Academy teachers. The center would help ensure a supply of qualified teachers for her branches in Egypt, and – if all goes well – throughout the region. “It has always been one of my visions to have Baby Academies all over the country and the region, because I know that this sector is very much underserved,” she says. “We are studying expansion plans in the region under several models including franchising.”

Nadia Wassef, one of five partners behind Diwan bookstore, refused to listen to the pessimists who said an upscale bookstore and café, like the ones so common in the West, would never catch on here. Egyptians don’t read books, they said. But a passion for reading drove Wassef and her partners to try it anyway. Five years since it opened, Diwan is now a household name, proving that Egyptians really do enjoy a good book.

If you ever meet Nadia Wassef, chances are she will have a book close at hand. Reading is her passion. “I simply can’t imagine going to sleep without reading a book,” she confesses.

Just over five years ago, Wassef, her sister Hend Wassef, and three friends – Nihal Schawky, Ziad Bahaa El-Din and Omar El-Desouky – were discussing their mutual passion for literature, when the idea struck of establishing a western-style bookstore in Egypt. “We were a group of friends all at crossroads in our lives,” recalls Wassef. “We were all unemployed at that moment in time for very different reasons – from dissatisfaction with work to personal reasons – and we were sitting around saying, ‘Wouldn’t it be great to open a bookstore?’ But it wouldn’t just be any kind of bookstore; it would be a celebration of cultures... it wouldn’t just be that books are all about bookworms with thick glasses. It would be that books are fun and sexy.”

While the partners were all fired up about the idea, their friends advised them that it would never succeed in Egypt. “It actually became a bit of a personal challenge because people kept telling us that ‘people don’t read’ or ‘a bookstore? How boring.’ There was this sort of placid negativity around the idea. Very few people said, ‘Wow, that would be great because we’re missing this in our lives.’”

Undeterred, the five partners ploughed ahead with their plans. While none of them had any experience in running a bookstore, or even knew much about the specific logistics, Wassef says things just seemed to fall into place. A friend owned a large ground floor apartment in Baehler’s Mansions in Zamalek. Wassef knew immediately that this was the ideal location for their bookshop – an atmospheric, historic building with frontage on 26th of July Street, one of the most pedestrian-friendly roads in Cairo.

For the partners, Diwan was about more than simply stocking shelves with books. They envisioned a meeting place for the culturally inclined – a nexus of art, culture, language and media. Modeled loosely on the likes of Barnes & Noble and Waterstone’s, the bookstore blends book selling with music, software, stationery and coffee. “The trend of coffee and books going together, and the lifestyle of not [being able] to live without a book – this was a worldwide trend. And I think it’s great because you are bringing everything into the center rather than having everything being marginal and peripheral,” explains Wassef.

This vision extended to the name, though Wassef admits Diwan wasn’t their first choice. “I can’t even remember what that other name was going to be but I can tell you that it wasn’t really as good. We thought that this was a fantastic name and it fits all the criteria. We wanted something that was easy to pronounce regardless of the language. It was something [that had] to do with literature – a Diwan of poetry; or a place where people meet to discuss things.”

But it was a stroke of luck – some might say genius – that gave Diwan its defining image. In early 2002, as Diwan was preparing to open its doors to the public, a dispute arose between Wassef and one of the other partners over the choice of the bookstore’s branded bags. Wassef proposed the sturdy and colorful bags that have since become a signature of the bookstore, while the partner deemed the pricey bags an unnecessary expense. While she could not make a rational business argument, Wassef held firm on her choice, insisting the bags should have character and beauty. She eventually won out, and has never regretted it.

“Thanks to this [fortunate decision], we don’t have an advertising budget until today. The bags are the advertising budget. People like to walk around with them and reuse them. They are very noticeable and totally unconventional. And they’ve taken on a life of their own,” she says.

While Wassef’s gut instinct proved correct in the case of the bags, the partners’ inexperience in the bookstore business led to a number of miscalculations. “For example, when we first opened up, we didn’t have a storage room and we weren’t even aware that we needed one,” she says. “We didn’t realize that the position of bar-coding, which now we have eight people doing over two shifts, existed. Hend, Nihal and I bar-coded every single book that landed on the shelf when we first opened up. We bought a computer system at the beginning that really didn’t work for us and we had to sell it for [next to nothing,] but we learned. This was a big labor of love and really not knowing better is sometimes a good thing.”

As a prolific reader, Wassef recognized the names of the various publishers she approached to place orders. Each responded differently, but generally regional publishers were most accommodating, while for US publishers it often depended on their experience with clients in the developing world. Some were welcoming, others insisted on payment upfront, and a few refused any business outright. “One guy told me flat out, you guys [in the developing world] don’t pay. You default on your payments and I am not interested,” she recalls.

Diwan has made a conscious effort to impress publishers. “We’ve always worked very hard to make sure that we are on time and that we have a very good reputation [with the publishers],” Wassef says. “We try to be proactive; rather than waiting for the [company] rep to sell us the books, we will reorder. So everything has gone well with publishers.”

And with the censors. Wassef explains that every book title must be approved by the censors before it can be distributed in Egypt. A representative of the Censor Office for Media & Entertainment reviews a list of Diwan’s books on order and identifies the titles they are concerned about. Once the orders arrive, copies of the selected books are provided to the censors for review. If the application is rejected, the books are returned to the publisher, which credits Diwan’s account for any payments received.

Five years in, Diwan’s flagship store in Zamalek has become a landmark for bibliophiles, but Wassef says the partners are poised to open new branches, starting with their second location in Heliopolis. “We took our time [expanding] because we had to take the time to get our house in order and build up our own system,” she says. “We had to make sure that our system is up [for expansion].”

Earlier attempts to branch out – including a small seasonal outlet in the Diplomatic Village at the North Coast, and a partnership deal with Cilantro coffeehouse chain that allowed Diwan to set up bookshops in several of the chain’s outlets – have taught them a few lessons about the secret to their success. “We now realize that the charm is in the product mix. The best formula is for us to have our own shops. So, you really can’t be inside something else; you have to be free standing,” Wassef explains.

She says it took two years to track down the right location for their first full-sized expansion branch – an old villa in Heliopolis with plenty of space for their products and a little café. The idea, she says, is to recreate the charm and atmosphere of the Zamalek store. For book lovers, she says, Diwan has become a place of refuge from the hectic Cairo lifestyle; a place where people escape both noise and reality by sinking into great literature.

As Wassef sees it, she is following Voltaire’s advice in Candide that the secret to happiness is to “cultivate your own garden.” She says: “Diwan is my garden; it is the garden that I have chosen to cultivate and I am happy now. I can’t make the world around me perfect. But at least I have that.”

It might seem a difficult concept to sell: customers order from a catalogue to have imported meat and seafood delivered to their door. But Jalal Abu-Gazaleh believed customers would buy into it if they felt assured the quality of the premium steaks and seafood was superior to that of their local butcher and fishmonger. And judging by the response, he could be on to something.

Owning a business that supplies high-quality imported meat to Egypt’s top five-star hotels has its benefits. For one, when you host barbecues at home, there’s no question your guests are going to be impressed. “I love cooking and people would come over and [comment] that the meat is really delicious,” recalls Jalal Abu-Gazaleh. “Everyone kept asking, where could we get it?”

Of course Abu-Gazaleh, a partner in AM Foods, knew the answer. But the food service company that includes the Four Seasons and Grand Hyatt among its clientele was never set up for retail. The Palestinian entrepreneur began to think whether it should be. In April 2006, he began to experiment with the idea, quietly opening Gourmet Egypt, a small division within AM Foods to handle retail orders of the same high-quality meat and seafood he was supplying to five-star hotels and restaurants.

At first it was just a secret among friends – a small but professional-looking flyer listing cuts and prices was sent to those who asked. Two part-time agents took orders and delivery drivers on motorcycles carried the orders to the customers’ homes. By his own reckoning, it was a very basic operation. “We just had a couple of guys in the office with mobile phones [handling the calls],” he says. “The orders started coming in. As we expanded the product range, sales went up. That’s how it all started.”

Gourmet Egypt’s products include Australian beef and lamb, Scottish smoked salmon, black tiger prawns from Vietnam and New Zealand green lip mussels. The company also supplies the same Australian wagyu beef (a highly-sought grass-fed Japanese breed of cattle) that was previously available only at a handful of Cairo’s finest steakhouses. All meat products are certified halal (slaughtered in accordance with Islamic requirements) while the seafood is flash frozen at its source, then shipped to Cairo in refrigerated containers. Gourmet Egypt’s call center handles orders, which are delivered in refrigerated vehicles from the company’s warehouses in Mohandiseen and Heliopolis to the customer’s home.

Keeping the operation running smoothly is an exercise in logistics, but Abu-Gazaleh says he was able to build on the model of Gourmet Egypt’s sister company, AM Foods, which has over a decade of experience in shipping these premium products to corporate customers. He started AM Foods with his uncle in 1996, having already set up a successful meat exporting business in Australia five years earlier.

But a home delivery service involved an entirely different set of variables, such as the logistics of importing and storing smaller quantities, and coordinating deliveries to new clients on tight schedules. “The culture of retail is very different from the culture of food service,” he says. “Food service accounts order 5,000 kilos... but an individual order will be very different.”

Early on, Abu-Gazaleh made the decision to outsource Gourmet Egypt’s sales function to a call center, whose bilingual sales representatives are trained on each product and its specifics. Their phone etiquette and responsiveness to customers are key ingredients in the business model, he insists. “We have a team of sale agents who are really motivated and passionate about delivering great service, [which is important] because great service is what our business is all about.”

In a little over a year since its inception, Gourmet Egypt has grown from two agents taking orders on their mobile phones to a staff of 35 and a fleet of refrigerated delivery trucks, and motorcycles rigged with double-insulated ice boxes. The company has relocated from AM Foods to its own headquarters in Mohandiseen, with two refrigerated warehouses, one in Mohandiseen and the other in Heliopolis. It is now eyeing larger premises to house its ever-expanding operation.

The company’s rapid growth has been based almost entirely on word of mouth. Abu-Gazaleh says he has consciously avoided advertising his company. “I think what scared me the most about advertising was [being] unsure how big the response would be, on the one hand; while on the other, I was too scared that we would get too big of a response and we wouldn’t be able to maintain quality,” he says. “We’re taking a long-term approach. It takes a lot to build a reputation, but you can very easily lose it. The last thing I wanted was to have a big advertising campaign and triple the number of calls to the call center without having enough agents to answer.”

He says word of mouth was the best model because it gave his team a chance to put systems in place without jeopardizing the quality of service. It has also given him a chance to better understand seasonal consumption patterns, such as the July-August low season. “In the summer, people go on holidays to the North Coast, some people are out of the country and the foreigners are away. Then there’s a period when the Christians are fasting, and there’s a period when Muslims are fasting. These definitely affect us. You have periods when [people] are not entertaining and a big part of our business is people who entertain.”

Anticipating these seasonal demand fluctuations is important, as it allows Gourmet Egypt to estimate how much stock of a product it will need for any given month. It is critical to get the quantity right as the frozen products require special storage spaces and have a short shelf life.

This is where being a sister company of AM Foods comes in handy. The two companies import the same meat and seafood products: AM Foods distributes to corporate clients, while Gourmet Egypt distributes to individual consumers. “The containers come regularly for AM Foods and we [Gourmet Egypt] provide our best estimate of what we think we are going to sell, keeping in mind the lead time and shelf life,” Abu-Gazaleh explains. If Gourmet Egypt overestimates demand of a particular product, AM Foods can usually take part of the order. On the other hand, if stock of certain product is running low, AM Foods may be able to cover the shortage. “We both have to look after our customers, though it’s important that we don’t have one company subsidizing the other.”

In anticipating demand, Gourmet Egypt must also take into account shipping time, which can take up to four weeks by container ship. The in-house logistics team must coordinate the various import shipments, accounting for customs clearance and Ministry of Health spot checks – all the while ensuring the frozen products remain in refrigerated containers until they reach the end consumer. With a year’s experience now under their belt, the operation is like a finely-tuned orchestra, boasts Abu-Gazaleh.

Having successfully tamed the logistics and delivery cycle, Abu-Gazaleh believes Gourmet Egypt is ready to open its flagship retail store in Maadi. “We’re in the final stages of opening our first store, which is about 250 square meters with a fresh meat section, a cheese and deli section and a seafood section,” he says. “We’ve gone to extremes to really create an amazing store with international standards.”

He says the retail outlet will add a new dimension to Gourmet Egypt’s business, and create a business that complements the home delivery stock. But mostly, it will reinforce the company’s underlying concept: to offer the highest-quality food products to discerning customers in the most convenient manner.

When Mona Erian created the products that are now the backbone of Nefertari Body Care, a line of 100-percent natural skin and hair care products, she had no idea that she was laying the groundwork for a successful entrepreneurial venture. Erian says her handmade products, which began as substitutes to the chemical-laden brands that her daughter was allergic to, have found their own niche in the Egyptian market.

Ten years ago, when Mona Erian’s daughter developed a rash on her scalp after using a commercial brand of shampoo, the concerned mother examined the ingredients listed on the back of the bottle. A graduate of the Faculty of the Pharmacology at Cairo University, with a Ph.D. in industrial pharmacology from Leicester University in the UK, she knew exactly what to look for. Any number of the artificial colors and preservatives could cause an allergic reaction, but one of them was not only a skin irritant, it was carcinogenic.

As most other shampoos were loaded with chemicals, Erian decided to “cook up” her own shampoo-alternative for her daughter to use instead. She made the first batch of her all-natural product in her kitchen using pure olive oil and all natural ingredients – no preservatives, no coloring agents and no artificial chemicals. The home-made “soap” worked beautifully, giving her daughter shiny hair without any allergic reaction. But replicating the experiment proved a lot more challenging.

“The first batch was just such a miracle because I just put this and this and that [together] and it turned out perfect,” she recalls. “Unfortunately, I never wrote down the percentages that went into the mixture.” In fact, it took Erian eight months and countless attempts to recreate the original formula.

But she knew she was on to something. Soon she was making soap not only for her daughter, but as gifts for a growing list of friends and family, who having tried her home-made soap, were convinced it was superior – or at least safer – than store-brand products. And as the batches grew larger to meet demand, the idea of Nefertari skin and body care products was born. “[It started as] more of a hobby than a business. Then I realized there was a need in the market,” she says.

Eight years ago, Erian registered Nefertari Body Care as a trademark and received permits from the Ministry of Health. She also began to secure patents for her various products. “It’s a very long and hectic process,” she explains. “But I had to protect my product and myself. It takes around six months for each product and costs around LE 2,000 per product.”

Prior to launching her business, Erian spent two years at the US Food & Drug Administration (FDA), which endowed her with a solid understanding of the various processes to test pharmaceutical products. She also worked for Jordanian drug maker Hikma Pharmaceuticals both in the marketing and registration of pharmaceutical products. The job gave her a thorough understanding of the patent process, and impressed upon her the importance of registering the formulas for her products at the patent office.

But this was her first time to attempt to register patents in Egypt. Her biggest challenge has been to convince the Ministry of Health that it is only necessary to register the basic formulas of her products, not all their variations. “International practice is to register the basic formula [of the product]. It doesn’t make sense [to register all the variations],” she says. “In lipstick, for instance, you might have 80 shades, but you don’t actually register every single color. You register the basic formula of the lipstick and they accept that the colors are simple variations of the formula. I’m trying to apply this concept because it just makes sense. But the process is expensive and very time consuming.”

With the Nefertari product line continually growing, Erian has spent a good share of time at the patent office. Today the brand boasts 167 products – ranging from soap to shampoo to bath salts, oils and moisturizers. All Nefertari products are handmade in Egypt using traditional techniques and local materials, with the exception of lavender and certain oils not readily available here. “[The formulas] are mine in the sense that they came from me, my environment and my surroundings. For instance, my grandmother used to make rosewater at home in a copper pot and seal it with bread dough to allow it to cook. It was a very old tradition,” she says. “I am making rosewater in the same way [using] a copper alembic.”

Erian found a niche in the market for her simple, all-natural products. She also takes pride in the Egyptian roots of her creations. “I am very much in love with Egypt. I wanted to create something really Egyptian; something that would not be swept away with the Southeast Asian invasion; something that had the characteristics and essence of this country; and something that nobody could really replicate. This was the whole idea. This is why our logo is ‘proudly handmade in Egypt.’”

As her client base grew, Erian opened a small shop in Zamalek, adding kiosks in high-end malls such CityStars and Nile City. She also moved the production line out of the cramped quarters of her kitchen and into a new factory in Dokki, which employs 29 workers. Her company’s growth has been as organic as the products themselves. With no formal business model, no carefully calibrated marketing strategy and no scientific market research to guide her decisions, Nefertari is all about things that come naturally – including business development.

“I didn’t do what I learned in marketing at all,” Erian admits. “We were always taught to do what the market wants, but I do what I want [and what I] like. It’s a mistake I know, but I can’t help it. When I asked things systematically and scientifically to find out what the market needs, it didn’t work at all because everyone had a different opinion. So I go by instinct; I go with what I would like to have.”

Feeling that advertising will commoditize her products and detract from their intrinsic value, Erian instead relies on word of mouth. “My clients are people who really like natural products or are adventurous buyers willing to try something new. I know that once they’ve tried my products, they will definitely come back.” Brimming with confidence, she offers shoppers samples of her all-natural products hoping that once they’re hooked, they will never go back to chemical-based products.

For the time being, Erian sees no competition. She points out that while some hair and skin care brands give the impression of being all natural, hers is the only Egyptian brand that truly is. But keeping her product true to its nature limits her expansion – Erian insists on mixing all the products herself to both protect the formula and to ensure the quality is never compromised. Her staff only pour and package the products.

So far, Erian has turned down two large export orders, one from a company in China and the other from an Italian drugstore chain. “They were talking about importing containers of my products, and I told them I simply can’t [meet this kind of demand], she says. “At the same time, I don’t want to switch to a machine [manufacturing model] simply because it will change the identity of the product. So I am content being a niche market product.”

But supply-side limitations have not prevented her from exporting her products entirely. Erian is currently preparing to establish her first kiosk in a mall in Qatar and is hoping to expand to other markets in the region, starting first with the UAE. She’s also working to receive FDA approval for her products to be sold in the US. “One of my clients lives in the US and she loves the product so much that she wants to establish a small outlet in her hometown. So we’re working on that right now. I would love to make this product available for as many people as possible, but I want it to keep its identity. I want it to always be a high-quality product that is proudly made in Egypt.”


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