Interview with Dan Stuart- CEO & CoFounder of Group Buying Startup

20 Jul, 2010

Group-buying is one of the web’s fastest-growing retail platforms, and UAE based GoNabit is the first to bring it to the Arab world. CEO and Co-Founder Dan Stuart answered some questions we had about GoNabit and its quest to bring value to consumers and businesses in the Arab world.

[Rock Sfeir]: What is GoNabit and what value does it bring to consumers and businesses?

[Dan Stuart]: GoNabit is the first group buying website in the Middle East. We source deeply discounted deals from local businesses to be sold to subscribers online within a limited period of time. GoNabit uses the power of social commerce to offer businesses a risk-free customer-creation engine.

[Rock Sfeir]: Many entrepreneurial-minded individuals are currently working in the corporate world and are unsure of when to make the move to launch a start-up. You were a part of before launching GoNabit. When did you decide that the time was right to launch your own start-up?

[Dan Stuart]: I’ve been thinking about this for a long time…but especially in the last year or so. I had an understanding with CEO Rabea Ataya that he would look closely and possibly invest in anything that I felt strongly about launching. My job made it easier since I spent my days looking at new launch opportunities and evaluating investment proposals.

That said, it was my passion…being on the pulse of what was new and relevant to the region. The key was to have the experience in sales, marketing and product. Without these in your leadership team you are in for larger challenges and won’t have as clear insight into what you are conceptualizing.

Eventually, I made a fairly quick decision, and started working…I didn’t think too much. I knew I had the capital to launch it, and the follow-on investment was verbally committed. You really need to be ready for the insecurity and sleepless nights. If not, keep your job and your sanity…but accept that you will never shape your own thing, too.

[Rock Sfeir]: Are you pleased with the sales numbers you are seeing? What items are currently selling out quickly?

[Dan Stuart]: We’ve done over 1,400 transactions in 8 weeks. Greater than 95% of that is e-commerce, so I think that surprises a lot of people …except me. I knew the will and interest was there. There was/is simply very little to buy online in this part of the world due to the structural challenges of selling online here.

People really like lifestyle products like massages. We do like to mix in some really quirky things too. It’s our testing phase after all, so we need really give the market a chance to give us broad feedback…and we’re listening.

[Rock Sfeir]: What are your plans for regional and international expansion? What is the most difficult part about growing regionally?

[Dan Stuart]: Every city is a new country…so that is tough. If I was home in Canada I’d have 15 cities of serious size to expand that all have one language, currency, and legal structure.

Here it is expensive, time-consuming and inhibits scale.

This is one of the reasons that very few online companies in the region are of any real size. They need growth to scale…and growth requires crossing many significant barriers. You can go be 5th biggest in India and have an easier time than owning the Middle East, because you can grow more inexpensively. Europe has made growth far more open. North America is much easier. The Middle East doesn’t do themselves any favors. That said, our strategic investor has a network throughout the region that we are leveraging to grow quickly. If you don’t have that you’ll have a tough time keeping pace.

We’re also sniffing around outside the region.

[Rock Sfeir]: How do you convince businesses to sign on with GoNabit? Are some business owners hesitant to take an initial hit in their profits, even if it means getting new customers?

[Dan Stuart]: GoNabit provides businesses with a risk free customer-creation engine:

  • No upfront cost – either financially, or in terms of time. Merchants only have to be prepared to offer a discount between 50-90% off their regular retail price,
  • An advertising investment concentrated on actual customers (nabber community exists to buy deals and have chosen to receive them),
  • Large reach into young savvy buyers (social, internet savvy professionals aged between 24 and 54 and weighted to females 60:40),
  • Brand awareness – an exclusive spotlight on your business  combined with the buzz and power of social media,
  • An additional shop window without the retail investment,
  • Certainty of a clear and measurable return on investment, and
  • Increased customer footfall – the opportunity to convert the one-off GoNabit voucher user into a loyal customer

It’s an education process for sure…and we’re doing it quite successfully. We can always get better. It’s only been 8 weeks after all.

[Rock Sfeir]: What forms of media are you utilizing to reach people? Do you feel that certain forms of media are more unique to the Middle-East than they might be elsewhere?

[Dan Stuart]: Social media is at the forefront for us. It is inherently a social undertaking where people buy online and share these experiences with friends offline. It makes sense to share since you do better if more people know. eBay and Souq work well when the auctions are not popularly known…so the price stays down. For us, buyers benefit by more people knowing.

We have also been strong in the media in terms of building awareness while educating the market. We haven’t really cracked the paid ads egg too much so far. We’ll see more of that as we grow and as we move in later phases of our awareness campaigns.

I think the Middle East is like most markets with little difference for our purposes. The scale is just smaller, but the sharing is no less personal and the measurement of marketing methods no less critical.

[Rock Sfeir]: What methods of payment do you accept?

[Dan Stuart]: We accept cash, cheque and paypal right now. We have 2-4 more payment methods under consideration, but not necessarily as additions, but some as replacements and localized solutions

[Rock Sfeir]: What would you have to say to Middle-Eastern consumers that are skeptical about online purchasing?

[Dan Stuart]: If you’re thinking about buying online then you are clearly not satisfied with the speed, access and choice available offline. E-commerce gives you this. If you participate in buying through proper online sites then you grow an industry, and that’s an industry that brings you economies of scale that pass on choice and cost benefits to you….you should want ecommerce to succeed.

Ultimately, look for sites with globally recognized security certifications, certified data usage policies, clear and obvious customer contact mechanisms….and try out those contact mechanisms. Send a test inquiry. If you don’t get an intelligent, timely and useful reply, then go elsewhere. You want to know that your question will get answered properly. You are paying for this contact and confidence so assign it value and feel confident in a site that provides it…and give them your business.

[Rock Sfeir]: As the Arab world gets more and more connected to the web, your target market keeps growing. But, what do you feel is the biggest challenge to the growth of GoNabit?

[Dan Stuart]: The biggest challenge is achieving scale despite trying to grow in a market that is fairly sluggish in terms of ecommerce. It’s sluggish because of the self-fulfilling prophecy in the region: people say that people don’t like buying online so many don’t because they hear that people don’t buy online in the region.

In fact, 10,000s buy through Aramex’s Shop and Ship each month…so that’s not true. We do 50-100 online transactions a day…making us one of the biggest ecommece sites in the region already.

I think the myth is hurting the region. The payment providers are generally poor and apathetic but that is changing with NBAD and Bank Audi. People will buy online if there is value for them, ease and confidence.

[Rock Sfeir]: Essentially, it seems that GoNabit is taking a proven concept and applying it to the usually under-served market in the Middle-East. Do you see forthcoming competition? Is it going to be a new start-up, or an established group-buying business operating internationally?

[Dan Stuart]: I think we’ll see both. We’ve led the market, done the education and proved the concept for the cities we are in. There will certainly be others to see that we have laid steps for them to follow in.

I think we’re bound to see an international player sniff around the region at some point, but there are far more mature businesses here in the region who remain independent (Bayt, Souq, etc), so we’re down the list from them in terms of sparking international interest.

Again, the structural challenges in the region make entry in markets beyond Dubai a real challenge for anyone apart from a really committed regional player.

What I would like to see is a company like us use this knowledge gained in a tough market to move to new market outside the region. We need to work harder and be better to overcome regional challenges…so why not apply that to other challenging markets and build a presence?

[Rock Sfeir]: Where do you see GoNabit heading in the next couple of years?

[Dan Stuart]: Tough call. We certainly have a vision that the founders share to some extent or another. We definitely want to grow and be a sustainable business held to global standards.

I would like to have sparked the rise of ecommerce in every country in the region, built the largest volume of ecommerce transaction of any website in the region, and sparked a new industry of startups that believe that ecommerce is do-able.

I’d also like to have to hire some staff who speaks another language besides English and Arabic 😉

[Rock Sfeir]: Anything else you want to add?

[Dan Stuart]: If you are thinking of launching a business, think big and start soon. Thinking small and waiting means you’ll never start, and even when you do, you won’t do much.

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7 Responses so far | Have Your Say!

  1. Amir kabbara  |  July 20th, 2010 at 12:10 PM #

    Great post!

    Interesting to see GoNabit utilize a differentiated ecommerce model that bridged online and offline purchasing – it has gained traction in a short period of time in a region where ecommerce never seemed too pupular.

  2. Group Buyer  |  July 21st, 2010 at 6:01 PM #

    Good post but don’t get too comfortable, competition is at the door step ( Start differentiating yourself now!!

  3. Dan Stuart  |  July 22nd, 2010 at 10:58 AM #

    Group Buyer,

    As you can probably understand when committing your time and finances to a startup, you never find a moment to feel comfortable. It is a constant effort to try to build something that has value and that people will use. I don’t think I’ve had a comfortable moment in the past 6 months – other than with my family. Such is life at a startup.

    As for competition, I look forward to new market entries that can contribute to growing an ecosystem of true e-commerce in the region. I hope more companies are able to launch and grow the space. The market is so young that its more likely to grow than fragment for a long while to come.

    If GoNabit can be part of that growth, then I’ll be really happy.

    Thanks for the encouragement.

    Dan Stuart

  4. Mohamed Hassan  |  July 25th, 2010 at 8:12 AM #

    “[Dan Stuart]: If you are thinking of launching a business, think big and start soon. Thinking small and waiting means you’ll never start, and even when you do, you won’t do much.”

    Thanks Dan, and keep up the good work.

  5. Ghassan Halazon  |  August 1st, 2010 at 5:31 AM #

    Great start Dan!

  6. Group Buying Giant Acquires UAE Startup GoNabit and Indonesian Startup DealKeren - ArabCrunch  |  June 27th, 2011 at 1:10 PM #

    […] GoNabit was launched last year and is backed by #1 job site in the Middle East Bayt. Here is an interview with Dan we did back in July […]

  7. LivingSocial يستحوذ على GoNabit من الإمارات - "عرب كرنش النسخة العربية"  |  June 27th, 2011 at 1:43 PM #

    […] وتم تأسيس GoNabit السنة الماضية وهي مدعومة ماديا من موقع التوظيف الأول في المنطقة العربية بيت. وكنا قد أجرينا مقابلة مع مؤسس الموقع باللغة الإنجليزية العام الماضي في عرب كرنش الإنجليزية هنا. […]

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