UAE-based investment banking veteran sets up a real estate tech start-up: Here’s why, how
Before entrepreneurship, Lebanese-Palestinian expat held jobs in construction, banking
"By 13, if I was not studying or training, I was working, and my summer jobs in Dubai were in the construction field," recalled Lebanese-Palestinian expat Walid Shihabi, 46. He inherited such a work ethic from his father, who had moved to Dubai in 1964 to build roads, schools, hospitals and housing in the fledgling city.
Shihabi did not see the jobs he did in his teens as punishment but rather as an opportunity. "I started my first business at 14, subcontracting maintenance jobs, and then spent the next six years on the income I had accumulated from this business."
He had learned that opportunities were always present if you were open to acquiring them. "The experiences helped me build knowledge from the ground up, understand what everyone does and why, and listen and learn before I speak."
Shihabi has over 15 years of investment banking experience in Dubai and the broader Middle East, mainly as managing director of asset manager SHUAA Capital and chief executive officer (CEO) of investment bank SHUAA Securities.
He played a role in raising money for some of the most prominent listed companies in the Middle East, including DP World, Air Arabia, Emaar Properties, Royal Jordanian, and Petrofac, among many others, while also disseminating data and research on the region's capital markets.
By 13, if I was not studying or training, I was working
Here is how his journey into entrepreneurship began.
Shihabi exited the investment banking industry in 2012 to establish a Dubai-based real estate fund and a real estate and hospitality management company. In the ten years that followed, he built an understanding of how the real estate functions as an asset class in the UAE, which included gauging investment parameters, operating points and core technology and data requirements.
That's when Shihabi transitioned gradually from a user of property investment technology into an innovator in the space, and led to him co-founding a real estate technology start-up with experienced business partners Silvia Eldawi and Omar Abu Innab.
Shihabi’s start-up ‘Keyper’ aims to improve how a UAE-based real estate investor manages his or her portfolio by allowing them to monitor and act on digital payments, rent renewals, occupancy rates, real-time monitoring of portfolio valuation, cash flow and expense reports while also maintaining a digital document library, requests, and statuses – all within an application.
"In today's on-demand world, technology is essential for interacting with landlord investors in a new, data-driven manner. The elimination of any superfluous processes and repetitive duties that once made up a substantial amount of a property manager's day is now automated. Landlords and property management teams can ensure their assets remain competitive," said Shihabi.
Why were the main cost for the business?
Shihabi said as a technology start-up with an operating contingent in real estate, their main pre-operating costs were around operating licenses and company structure.
Other main expenses pertained to sourcing and recruiting qualified talent in technology and product development, commercial and operational staffing, data and systems acquisitions and office set-up, he added.
"Start-up builder and incubator WeBuild Ventures contributed the initial capital for the pre-operating stage, said Shihabi. (What is meant by incubators in entrepreneurship? A business incubator is a workspace created to offer start-ups and new ventures access to the resources they need.)
Shihabi shares two entrepreneur tips from his experiences.
Tip #1: Learn to deal with abrupt and disruptive change, be it in a situational or regulatory framework.
Shihabi has observed that the start-up ecosystem in Dubai has evolved immensely since his first venture, with access to capital, government infrastructure and general support and maturity of an ecosystem; hence, participants are in a much better place today.
"They say you must be slightly eccentric to take the plunge from a stable and secure career into starting a business. I introduced a simple discipline to my life. Be informed, recognise a changing environment, and establish a clear decision path concerning the new information."
Find answers to questions like: "How does it affect our current business and roadmap? What precisely are the material effects? Where exactly is the threat, and what may be the opportunity associated with the change? Does it require no response, a tactical response, or a full-fledged strategy change?
"Engage with the right internal and external resources to formulate the associated plan, then implement monitor and adjust. With this discipline, you will find out that 75 per cent of the information you will come across and the process is noise, around 20 per cent will require a tactical adjustment (for example, in operational processes or messaging) and only about 5 per cent warrants strategic consideration. Learning how to identify the 5 per cent may mean the difference between a thriving business and a failing one."
You must be slightly eccentric to take the plunge from a stable and secure career into starting a business
Tip #2: There is no shortcut to success; deep-rooted knowledge is always needed to prosper.
Research, learn and re-learn, said Shihabi, who suggested that one should construct a structure of beliefs and knowledge, then tear it down and start again. Simply going after the next big thing without spending the time and effort to grasp what you are trying to achieve and why; is improper, he added.
He recalled starting a career in the investment segment; after graduating from university, "The UAE did not have a stock exchange…. My first task was to construct a price history of shares in the market and then build a stock index for the UAE market to start understanding market trends, returns, public company market values and historical performance.
"A local newspaper had been publishing indicative prices for public company shares for several years, but there was no central historical record. So, I went every day for two months to the Dubai Chamber of Commerce library on Dubai Creek, which had an archive of that newspaper going back several years. I would bring along a bag of coins for the coin-operated copy machine and photocopy the price list for every day going back four years, and then take the copies and enter the figures on a spreadsheet.
"Then, for the following two months, I started to visit the offices of every country's public company, demanding copies of their financial statements and annual reports and reading them from cover to cover. By the end of those four months, I was probably the most knowledgeable person in the world about historical price trends and the performance of public companies in the UAE at the age of 21."
Where do you prefer to invest your savings?
Shihabi said real estate is an evergreen asset class that is finite, will always have utility, value and generate an income. My father often said, ”’Real estate may get sick, but it never dies.' It can get disrupted, but it is the bedrock of family wealth and the ultimate haven for savings. However, it also needs nurturing and knowledge; you can overpay, mismanage or lose money in it, and it tends to have a very high emotional contingent.”
So, he recommended taking on early-stage investments in real estate, investing based on its merit as an investment asset class. "Suppose you can invest the accumulated income in retaining and building the value of your property and building up a complimentary portfolio. In that case, this will hold you in excellent stead over time," he added.
He said that it is essential to have a diversified portfolio for savings; a 40 per cent allocation of savings in an index-based allocation method for global equities, debt and commodities tends to average out and perform positively over time.
He has also trained his kids (11 and 13) to save and learn investment discipline and research simultaneously. "My kids have a stock trading account, in which I contribute Dh 1,000 monthly. They can buy and hold any stock as long as they present their case for the investment convincingly."