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What it takes to achieve entrepreneurial success

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Javed Khattak

Javed Khattak is a successful serial entrepreneur, an established C-suite executive and an award-winning CFO. However, the young entrepreneur’s path to success hasn’t always been easy. Javed reveals exclusively to Global Banking and Finance Review how he is leading the property market with flexible investments and profitable outcomes.

Property markets are slow to evolve, opaque and inefficient. While some countries like the UK are better than others, there is still significant scope to innovate and improve. Zisk Properties was founded in 2016 by two brothers, Javed and Zafer, with the aim to help solve the challenges that exist in buying and investing in the property market.

Javed, who has a strong corporate background leading multi-billion dollar projects, identified several areas that needed consideration when investing in the property market. These challenges included making transactions more efficient, faster, increasing security, reducing the number of parties involved in a transaction, and most importantly, reducing costs.

In addition, there are a considerable number of challenges associated with purchasing an investment property including requiring large capital, access to good property deals through a strong network within the property market and successfully managing all stakeholders involved (such as sellers, estate agents, lawyers and surveyors). Property investment is currently a complicated and daunting process that is extremely time-consuming. A property transaction can easily take up to 6 months or even longer. Furthermore, managing a property effectively not only requires time but also relevant skills and experience.

Zisk Properties was founded precisely to tackle these challenges, with the aim to innovate while helping everyone (who qualifies) to invest in properties with ease and convenience. The use of latest technologies and data analytics combined with the crowdfunding business concept and an FCA registered fund structure are the key elements that Zisk Properties utilises to enable it to become a leader in the property market and pave a way for a better future.

Javed left his corporate career unsure of the rocky road that lay ahead. A mere 3 years later, Javed has created a new company, completed an extremely successful pilot which helped families in Pakistan to get on the property ladder and just recently launched in the UK, ready to revolutionise the property investment industry. Javed was invited to be part of on an internal panel by Dutch multinational banking and financial services corporation with total assets of US$1 trillion, ING, to discuss and explore the future of PropTech.

Within a year of entering the startup space, Javed was named CFO of the Year by Wealth and Finance Magazine, securing his rightful place in the PropTech industry. Javed states:

“Reinventing myself as an entrepreneur in the tech industry has been a steep but great learning curve. My deep technical knowledge in the field has allowed me to create a business that not only gives the property investment sector a much needed overhaul, but also allows ordinary people, like you and me, to invest in property. Something that has previously been challenging, to say the least.”

Coming into the entrepreneurial world was initially extremely challenging and Javed found himself learning some very expensive lessons. One of the most important lessons was that one’s team is not only one of the most important contributors to a successful business but also one of the most difficult assets to develop. Everyone knows the former but under-appreciates the challenge of the latter, noting the impact of both are significantly more for startups and new companies.

When launching Zisk Properties, it was difficult to find and recruit the right people, having the required mindset, skills and experience. As a startup, limited resources and restricted budgets make this process that much harder. However, perseverance is key. It is important to be open to new taking chances, going with one’s gut and, having the patience to train employees who show the qualities and passion that resonate with you and your business. Equally, it is crucial to protect your business and therefore have the strength and responsiveness to let go of employees who don’t match your company’s culture or needs.

Launching a business is like getting on a roller coaster; there are a variety of highs and lows. Coming from a corporate background, it is important to understand that there are key differences between large organisations and startups, including the availability of and ability to attract quality resources, readily available access to expertise, brand awareness and credibility, technology and systems, governance structures and processes, big budgets and the list goes on. As an entrepreneur, you must learn to walk before you run – with most of the aforementioned items needed to be built from scratch.

Even if you have the financial support to “go big”, it’s not a good idea. Another costly lesson for Javed. Now, Javed’s approach is much more experiment based. Have a view, vision or opinion; create a hypothesis around it and define an experiment to test it with clear KPIs and metrics; undertake them in a very systematic manner understanding your constraints and going with high value potentials and/or low hanging fruit first (doing the usual cost-benefit analysis overlaid with a risk matrix). The final step – this data-driven approach is only as good as the time taken to analyse and interpret the results.

Your clients are absolutely crucial to your business – this can’t be emphasised enough. It is important to talk to your clients and potential clients as part of the experimentation. It is also worth bearing in mind that most likely, your clients won’t know their needs and wants accurately themselves, let alone being able to differentiate between them. So Javed prefers quantitative approaches more than qualitative – not undermining the value of qualitative ones of course. So, it is worthwhile building these processes into your experiments. Only once you have completed these initial steps and verified what your customers need or want, then should one start to scale up whilst still focusing on refining and iterating as is necessary using similar experimentation. Building goodwill with your initial clients and having them on your side goes a long way for a young company. Always aim to help them when the opportunity presents itself and ensure you are consistently providing and creating value for them. We all know “word of mouth is indeed very powerful!”

This is just the beginning of Javed’s success story. Today, he is also supporting various other ventures including creating his own software house to support Zisk Properties and even other technology oriented projects. Through all of his ventures, he wants to continue his father’s legacy of giving back to society, which is very important to him. With Javed’s areas of interest and expertise in combination with his vision and passion to truly make a difference, there is no doubt that much greater things lie ahead.

Javed Khattak

Javed Khattak

Javed Khattak is a qualified actuary (FIA), an LSE graduate, is currently on various boards and regularly advises companies on risk management, strategy, finance, technology (incl FinTech and PropTech), real estate, blockchain/DLT, AI and innovation. His clients range from startups to organisations with a market cap of over £60bn, and include respectable household global brands including HSBC, Thomson Reuters, GSK, M&S, Aviva, PwC and PA Consulting Group, to name a few. Javed is the co-founder of Zisk Properties, which uses the latest technologies and data analytics, combined with a crowdfunding business concept and an FCA registered fund structure to lead the property market.

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Deloitte: Middle East organizations need to rethink their workforce in the wake of COVID-19

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Deloitte: Middle East organizations need to rethink their workforce in the wake of COVID-19 1

Organizations in the Middle East have had to take immediate actions in reaction to the COVID-19 pandemic, such as shifting to remote and virtual work, implementing new ways of working and redirecting the workforce on critical activities. According to Deloitte’s 10th annual 2020 Middle East Human Capital Trends report, “The social enterprise at work: Paradox as a path forward,” organizations now need to think about how to sustain these actions by embedding them into their organizational culture.

“COVID-19 has created a clarifying moment for work and the workforce. Organizations that expand their focus on worker well-being, from programs adjacent to work to designing well-being into the work itself, will help their workers not only feel their best but perform at their best. Doing so will strengthen the tie between well-being and organizational outcomes, drive meaningful work, and foster a greater sense of belonging overall,” said Ghassan Turqieh, Consulting Partner, Human Capital, Deloitte Middle East.

According to the Deloitte report, many organizations in the Middle East made quick arrangements to engage with employees in the wake of the pandemic through frequent communications, multiple webinars where senior leaders addressed employee concerns, virtual employee events, manager check-ins, periodic calls and other targeted interactions with the workforce.

The report also discussed how UAE and KSA governments have reexamined work policies and practices, amended regulations and introduced COVID-19 initiatives to support companies and the workforce in the public and private sectors. Flexible and remote working, team-building and engagement activities, well-ness programs, recognition awards and modern workspaces are among the many things that are now adding to the employee experience.

Key findings from the Deloitte global report include:

  • Only 17% of respondents are making significant investments in reskilling to support their AI strategy with only 12% using AI primarily to replace workers;
  • 27% of respondents have clear policies and practices to manage the ethical challenges resulting from the future of work despite 85% of respondents saying the future of work raises ethical challenges;
  • Three-quarters of leaders are expecting to source new skills and capabilities through reskilling, but only 45% are rewarding workers for the development of new skills; and
  • Only 45% of respondents are prepared or very prepared to take advantage of the alternative workforce to access key capabilities despite gig workers being likely to comprise 43% of the U.S. workforce this year according to the Bureau of Labor Statistics.

“Worker well-being is a top priority today, and similarly to the rest of the world, companies in the Middle East are focusing their efforts to redesign work around well-being by understanding workforce well-being needs,” said Rania Abu Shukur, Director, Human Capital, Consulting, Deloitte Middle East.

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One in five insurance customers saw an improvement in customer service over lockdown, research shows

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One in five insurance customers saw an improvement in customer service over lockdown, research shows 2

SAS research reveals that insurers improved their customer experience during lockdown

One in five insurance customers noted an improvement in their customer experience over lockdown, according to research conducted by SAS, the leader in analytics. This far outweighed the 11% of customers who felt it had deteriorated over the same period.

This is positive news for insurers during such challenging times, with 59% of customers also saying that they would pay more to buy or use products and services from any company that provided them with a good customer experience over lockdown.

The improvement in customer experience also coincides with a rise in the number of digital customers. Since the pandemic started, the number of insurance customers using a digital service or app has grown by 10%. Three-fifths (60%) of new users plan to continue using these digital services moving forward.

However, while the number of digital users grew over lockdown, half of the insurance customer base has not yet chosen to move to digital insurance apps or services.

Paul Ridge, Head of Insurance at SAS UK & Ireland, said:

“It’s impressive that there was a net improvement in customer experience during lockdown, despite the challenges the industry was facing with a transition to remote working and increased claims for things like cancelled holidays. While many were forced to wait on customer help lines for long periods, part of the improvement may be explained by even a small (10%) increase in the number of digital users.

“However, it’s clear that a huge number of customers are still yet to make the move online. It’s vital that insurers provide the most accurate, timely and relevant offerings to customers, and this is best achieved by having additional insight into online customer journeys so they can understand them better. Using analytics and AI, insurers can seize this opportunity to digitalise their customer experience and offer a more personalised approach.”

Meanwhile, for insurers that fail to offer a consistently satisfactory customer experience, the price could be severe. A third (33%) of customers claimed that they would ditch a company after just one poor experience. This number jumps to 90% for between one and five poor examples of customer service.

For more insight into how other industries across EMEA performed during lockdown, download the full report: Experience 2030: Has COVID-19 created a new kind of customer? 

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The power of superstar firms amid the pandemic: should regulators intervene?

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The power of superstar firms amid the pandemic: should regulators intervene? 3

By Professor Anton Korinek, Darden School of Business and Research Associate at the Oxford Future of Humanity Institute. Gosia Glinska, associate director of research impact, Batten Institute for Entrepreneurship and Innovation, Darden School of Business

Recent news that Apple hit a market cap of USD2 trillion highlights an extraordinary success story: A once struggling computer-maker on the verge of bankruptcy innovates its way to becoming the most valuable publicly traded company in the United States.

Apple’s 13-figure valuation is indicative of a larger trend that is not entirely benign — the rise of a handful of superstar firms that dominate the economy. Over the past three decades, advances in information technology, mainly the Internet, have supercharged the superstar phenomenon, allowing a small number of entrepreneurs and firms to serve a large market and reap outsize rewards. And COVID-19 has greatly accelerated the phenomenon by pushing us all into a more virtual world.

Apple — along with Amazon, Facebook, Google, Microsoft and Netflix — is a case in point. The combined market value of those six companies exceeds USD7 trillion, which accounts for more than a quarter of the entire S&P 500 index. Even amid the pandemic’s economic wreckage, these megacompanies continue to prosper. The combined share price for Apple and its five peers was up more than 43 percent this year, while the rest of the companies in the S&P 500 collectively lost about 4 percent.[1]

Superstar firms can be found in almost every sector of the economy, including tech, management, finance, sports and the music industry. They command increasing market power, which has consequences for technological, social and economic progress. It is, therefore, critical to understand how their advantages arose in the first place.

THE FORCES BEHIND THE SUPERSTAR PHENOMENON

The “economics of superstars” was first studied by the late University of Chicago economist Sherwin Rosen. Forty years ago, Rosen argued that certain new technologies would significantly enhance the productivity of talented workers, enabling superstars in any industry to greatly expand the scope of their market, while reducing market opportunities for everyone else.[2] Digital innovations, including advances in the collection, processing and transmission of information, is what Rosen envisioned would lead to the superstar phenomenon.

Digital technologies are information goods, which are different from the traditional, physical goods in the economy. What it means is that fundamentally different economic considerations apply. Unlike physical goods — a loaf of bread or a car — information goods have two key properties: They are non-rival and excludable. Non-rival means that something can be used without being used up. Excludability means that an owner of digital innovation can prevent others from using it, by protecting it with patents, for example. These two fundamental properties of information goods are what give rise to the superstar phenomenon.

In a working paper I co-authored with Professor Ding Xuan Ng at Johns Hopkins University[3], we described superstars as arising from digital innovations that require upfront fixed costs that allow firms to reduce the marginal costs of serving additional customers.[4] For example, once an online travel agency has programmed its website at a fixed cost, it can easily displace thousands of traditional travel agents without much additional effort, scaling at near-zero cost.

Because a firm can exclude others from using its digital innovation, it automatically gains market power. The innovator then uses that power to charge a mark-up and earn a monopoly rent — basically, a price superstars charge in excess of what it costs them to provide the good — which we call the ‘superstar profit share’.

THE POLICYMAKER’S DILEMMA

In a vibrant free market economy, businesses compete for customers by innovating and improving their offerings while keeping prices low; otherwise, they are displaced by more innovative rivals entering the market. Unfortunately, the increasing monopolization of the economy by technology superstars is weakening the competitive environment around the world.

Monopoly power is the main inefficiency from the emergence of superstar firms, because superstars can exclude others from using the innovation that they have developed.

So, what policy measures can be employed to mitigate the inefficiencies arising from the superstar phenomenon?

We do have antitrust policies designed to promote competition and hence economic efficiency. Authorities could take a drastic measure and break up monopolies. Or they could tax all those excess profits megacompanies make.

Another policy to consider involves giving consumers control rights over their data. Right now, only companies have that data, and they are selling it. If you free it up and don’t allow them to sell it anymore, it reduces their monopoly profits. And if you give consumers more freedom over their data, they could, for example, share it with the latest start-up and create a more competitive landscape.

However, such policy remedies can be a double-edged sword. On the one hand, they reduce monopoly rents. On the other hand, they can also reduce innovation.

Innovation requires investments in R&D, which represent a significant sunk cost that only large firms can afford. Government regulations can easily backfire, discouraging large firms from making long-term R&D investments.

What, then, is the best policy intervention? Professor Ding Xuan Ng and I believe that basic research should be public. Digital innovations should be financed by public investments and should be provided as free public goods to all. This would make the superstar phenomenon disappear, and the effects of digital innovation would simply show up as productivity increases.[5]

We live in a brave new world that is increasingly based on information. Because the information economy is different from the traditional economy, antitrust policy should be revamped to reflect that. Instead of worrying about the economy being eaten up by these gigantic monopolies, policymakers need to focus on the question ‘What specific actions can we pursue to make the economy more competitive and efficient?’

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