WILDGEESE EMIGRANT BUSINESS LEADERS ON OPPORTUNITIES ABROAD/PAUL KENNYfounder and chief executive of Cobone, Dubai
“MY GOAL is to create the first $1 billion exit of an internet company in the Middle East,” says Dubai-based Paul Kenny.
Not bad for the grandson of a Galway bookseller – but with his late grandmother’s bookshop the second in the world to sell books online, his internet savvy is hardly a surprise.
Leaving the family business to move to Dubai just four years ago, the NUI Galway business graduate is founder and chief executive of daily deal company Cobone. Like its equivalents Groupon and Living Social, the site negotiates massive discounts with businesses, which it then passes to its subscribers as a daily coupon.
“A daily deal could be a discount on a spa or restaurant or an experience,” Kenny says. However doing business in one of the wealthiest parts of the planet means the deals are just as likely to be yachting breaks or cars.
“We were the first [daily deal] site in the world to sell a car,” says Kenny. “We sold a 2011 Nissan Pathfinder for almost $27,000 in one of our daily deals – we actually sold four of them in a day.”
It was an introduction to the Irish chairman of the luxury hotel group Jumeirah on a family holiday to Dubai when Kenny was 20 that first gave him the travel bug.
There followed an offer of an internship with the hotel group and, while all of Kenny’s Galway friends were “making good salaries and buying properties”, he left the Irish boom behind for an entry-level marketing position with the hotel in 2007.
Within three months he was put on the company’s fast-track programme where he worked for 18 months before jumping to an online media company and then to the Emirates Group.
There he used online marketing and search engine optimisation techniques to drive record revenues.
“I realised quite quickly that there was a huge opportunity in the region to do something online,” recalls Kenny. With investors there traditionally more occupied with bricks than clicks, though, the online arena was surprisingly under-developed.
While the United Arab Emirates has 75 per cent broadband penetration, Kenny says, “most people’s money was going into buildings. There wasn’t many people investing in intellectual property like a website that could generate long-term revenue.
“The standard things you do in Europe, like paying for your bills online, doing your grocery shopping or ordering a book online, you can’t do that here.”
However with Kenny’s online business acumen making waves, two venture capitalists bet their money on the man.
“They said ‘we’d like to invest in you as a person so please come up with an idea and we will fund you’.”
Seeing the success of Groupon in the US, Kenny took up their offer with the goal of creating a daily deals site for the Middle East. “I thought, why not become a 26-year-old CEO where I can drive the pace in the company? We’re 10 months old now; I have 80 employees and operations in five countries. It’s been an absolutely crazy journey.”
With 600,000 subscribers logging in for their daily deal across the UAE, Lebanon, Saudi Arabia, Jordan and Egypt, Kenny has learned that consumers in the region like to do business on their terms. Despite having high disposable income, credit-card ownership in the UAE, for example, runs at just 15 or 20 per cent.
While Kenny’s way around it might go against the grain of online retailing, it works. “We offer the option of cash on delivery which means someone will deliver the coupon to your door.”
With the provider of online payment systems in the region charging high prices, according to Kenny, this personal delivery works out as “the cheapest payment mechanism we have”.
If as many residents of the region, though, are as young, rich and untaxed as the statistics tell us, why are they going gaga for coupons?
“I don’t think there is any shame in using a coupon – but it’s not really about discounting any more, it’s more about experiencing different things you wouldn’t normally experience. A lot of people would never have done parasailing but because of us, they’ve done it.
“The average coupon price is quadruple what the European counterpart is, which shows you how high the disposable income is here. We often put up deals for over a $1,000 and people are buying hundreds of them.”
So what’s it like to live in Dubai? “You have to remember you are living in a Muslim country,” he says. “The holy month of Ramadan is coming up where you can’t eat in public during the day. Movies, print and TV news are all screened here but you can drink alcohol,” he says, dispelling the myth of enforced sobriety.
“But the opportunities in the Middle East are massive,” he adds. “If you’re a budding entrepreneur and you have ideas, here is the place to do it. A lot of things haven’t been done here yet and they are just waiting to be done.”
