This second biographical article depicts another period in
the life of entrepreneur Hazem Mulhim, CEO and founder of EastNets.
Pivoting or completely shifting product orientation is a
strategy most successful entrepreneurs pursue to adapt their vision and
trajectory to shifting markets and their emerging challenges.
اضافة اعلان
After
Hazem Mulhim had launched his first Jordanian venture Jordanian Computer Center (JCC), a showroom selling computers in the early
1980s, he realized his first-mover market advantage was being easily challenged.
The end of the first venture
While Mulhim’s venture into computer retailing experienced
early growth, cheap cloned PCs were soon spreading fast and slowing down his
business.
“I realized I was just a reseller of other people’s goods,
no more than a follower,” Mulhim told Jordan News. But the “cataclysmic event
that ended my business would come with Saddam Hussein’s invasion of Kuwait in
1990”.
Kuwait-based Sakhr, which supplied the Arabic-English
computer that was Mulhim’s best-selling computer in Jordan, halted its
production of computers. JCC was now stuck with over $1.5 million of Sakhr
computer inventory and hardly anyone wanted to buy them at the time.
“Eventually, I was advised by a consultant friend to offload
my massive Sakhr computer inventory below cost price. I also had to reschedule
my debts. Thankfully, my father would step in and shield me, guaranteeing my
debt repayment to creditor banks.”
Mulhim still had to pay his debt somehow, so he pursued
different new business ideas.
“In a word, this meant hustling around,” he said.
New business ventures begin
The first relative success Mulhim had next came from a
low-yield tender contract with
Jordan’s Ministry of Education to equip 30
schools with educational computer systems. The new business helped secure some
income but it was still not enough to meet his mounting debt obligations.
During his frequent dealings with his creditor banks, Mulhim
would also learn how they operated. This gave him ideas that would prove
transformative later in his business career.
Earlier in his professional life, Mulhim had seen how
software and technology were the true locomotives of progress.
“I started to think about how I would apply software and
technology to banking processes,” he said.
“It became clear to me that Jordan’s expanding banking
industry needed different networking solutions. What came to my mind was
satellite connectivity.”
A satellite link was a daring idea then, but he still worked
on it for months, successfully persuading leading satellite operators to come
to Jordan. He also sold the idea to Jordanian banks, which initially would
agree to come in as investors and buyers of the technology.
All seemed rosy at the start, but to his shock, the banks
would soon cut him out and set up the operation on their own.
“I was definitely wounded by this experience, but I also
learned a valuable lesson, which is to have something tangible, a product, a
market and a team to deliver… and that was exactly what I did.”
Mulhim would pursue another emerging technology concept:
phone banking.
“The satellite business, which failed to take off
eventually, was replaced by phone banking. This marked a turning point in my
business.”
His phone-banking idea took off in Jordan, and through JCC
he started developing phone-banking systems. Still, as technology reseller and
agent, his income was not rising enough to serve his big bank debt and its
accumulating interest payments.
“This meant my search for a truly profitable business had to
continue.”
Diversifying
In a chance meeting during a family holiday in
Cyprus,
Mulhim struck a friendship with a vacationing British businessman. His new
acquaintance was developing software for connecting banks through personal
computers to the SWIFT money transfer and financial messaging network, a novel
idea at the time.
“I knew that this new software, NovaSwift, would be
game-changing in the
Middle East. Back then, most Arab banks were medium sized
and could not afford to pay half a million dollars for the big computers that
hosted the SWIFT technology; most used cumbersome TELEX machines for bank
transactions.”
This new business idea worked and Mulhim’s business soon
expanded across Middle Eastern markets and beyond. It was also then that his
company’s brand name was changed, first to Eastern Networks, then later again
it was modified to
EastNets.
With two products selling well in his newly renamed venture,
Mulhim was seeing his cash flow increase gradually, but it still was not enough
to end his now-inflated debt. His real break from his debt burden would
eventually come from winning the tender for issuing Jordan’s first national
identity card — two million of them.
“The contract we won as a company was our biggest to date,
at $3.5 million, and it was one million dollars lower than the next bidder.”
After completing the project and receiving payment from the
Jordanian government, Mulhim immediately paid up all his bank debts.
“At that moment of debt repayment, it felt like I was the
richest man on earth,” he said.
Going global
Mulhim’s business continued to grow, expanding
geographically and diversifying. His first big break came when the global
SWIFT organization chose his company (in Dubai now) as its hub in the MENA region. A
few years later, EastNets would break into the fast-growing regulatory
technology industry (reg-tech) as a software solutions developer for financial
institutions. He would eventually acquire a software company in the European
Union and continue expanding worldwide through offices across five continents.
Mulhim’s full journey, from a small shop in Amman to a
global software powerhouse, is available in his autobiography, titled “Two
Brown Envelopes”. The book goes on sale at Amazon on January 25, 2022.
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