Moneycontrol
Oct 13, 2017 08:05 PM IST | Source: Moneycontrol.com

Startup Lessons: How to establish successful ventures in war zones

It’s difficult to match up to the thrill of entrepreneurship in conflict prone areas. Read the success story of two Indian entrepreneurs in war torn Iraq...

Startup Lessons: How to establish successful ventures in war zones

By Major Sunil Shetty, SM (retd)

It was June of 2014. Mosul a town with 1.6 million population and located 80 kilometres West of Erbil- the capital of Kurdistan region had surrendered to the Islamic State(IS) fighters also known as the Daesh.

The fall of Erbil, a much more prominent city, looked imminent.

While local residents of Erbil city were preparing for the worse, the expats were running out, in hoards, from this Northern Iraqi town to their respective countries.

In the midst of the chaos and confusion Sukhpal Singh, an Indian entrepreneur, hailing from Jalandhar Punjab had a difficult decision to make.

His limited choices were-join the expatriate exodus or stay put to protect his newly established venture that he had built after toiling hard for years.

"I had over one lakh fifty thousand dollars (US) in (Erbil) market (in recoveries), and I had stocks worth over fifty thousand (dollars) in my warehouse. I couldn't have risked leaving this," says Sukhpal Singh, founder of Shma (meaning flame) General Trading company.

He started his venture in 2013 with an investment of about USD 40,000.

Shma is the wholesale and distribution company that supplies Indian products to leading supermarkets chains across the Kurdistan region in Northern Iraq.

Step a little back in time; many would remember the TV footage of the toppling of Saddam Hussein's statue (the deposed Iraqi President) in the Firdaus Square, in April of 2003, which "marked the symbolic end of the Battle of Baghdad."

Just a week before this event, a young Indian aged 23, hailing from the Pondicherry City in India took advantage of a "free visa" and reached Iraq to work with a US military contractor.

"I was young and didn't know" what risk I was taking by going to Iraq, says Sadiq Basha, now a business consultant who has lived and traveled across Iraq for the past 14 years.

In more than one way; Sadiq and Sukhpal are different.

However, one common factor unites the two- the spirit of entrepreneurship.

They came from different regions of India. Sadiq is younger to Sukhpal by a decade.

Sukhpal first set foot in Northern Iraq whereas Sadiq entered through Southern Iraq.

However, both used a job opportunity as a stepping stone towards their ultimate goal - to become an entrepreneur.

Gaining from their success stories and my experiences in setting up businesses in Afghanistan and Iraq, here are a few lessons on how to establish a venture in conflict areas:

1. The first mover advantage in conflict areas: There are more opportunities then competition in most conflict areas on the planet.

This lure of immense opportunities and minimal competition drove both Sukhpal and Sadiq to Iraq.

Sukhpal was working as a foreman in a car company in Dubai.

He had heard about the emerging business opportunities Iraq.

"I knew there would be development activities in Iraq as the

country was opening up."

Shma

"It was the place I wanted to be in" as "doing business in an established market is difficult," says Sukhpal.

Supporting this argument, Sadiq says, "there are millions like me" in Dubai.

I wanted to go to a place where there was less competition to me."

2. Be sharp and spot opportunities in war zones: Sukhpal noticed that even though there was a significant Indian community in the Kurdish region, especial in Erbil City, finding Indian products particularly food items were a big challenge.

Though a motor mechanic by education and experience; he knew that was the opportunity, he was waiting for - and thus Shma was launched.

Today, apart from wholesale and distribution - he has a mini supermarket with a food court.

Similarly, Sadiq after working with numerous companies in a variety of sectors including Oil & Gas, he realized that there was a dire need for consultants to work with small and medium Iraqi enterprises.

He launched a business development company to provide consulting services to local entities.

Both the Indian entrepreneurs agree; one must always be on the lookout for opportunities.

"I look at a product and think that it can be sold and sourced from India," says Sukhpal.

3. Work experience matters in entrepreneurship: Sadiq's entrepreneurial journey started much later in 2013.

In the initial years, he worked with multiple companies and grew from a Dining Hall Supervisor with a US military contractors to the Deputy General manager in an Iraq telecom company.

During this period, he added two business degrees to his credentials.

A member loyal to the Islamic State in Iraq and the Levant (ISIL) waves an ISIL flag in Raqqa June 29, 2014. The offshoot of al Qaeda which has captured swathes of territory in Iraq and Syria has declared itself an Islamic "Caliphate" and called on factions worldwide to pledge their allegiance, a statement posted on jihadist websites said on Sunday. The group, previously known as the Islamic State in Iraq and the Levant (ISIL), also known as ISIS, has renamed itself "Islamic State" and proclaimed its leader Abu Bakr al-Baghadi as "Caliph" - the head of the state, the statement said. REUTERS/Stringer (SYRIA - Tags: POLITICS CIVIL UNREST TPX IMAGES OF THE DAY) FOR BEST QUALITY IMAGE ALSO SEE: GF2EAAO0VU501 - GM1EA6U08CF01

"My jobs helped me build contacts with local business, and that came handy when I decided to start on my own," said Sadiq. Sukhpal agrees and adds, "my job with Cihan motors,” the dealers for Toyota cars in Erbil, “provided me a base (and) helped me understand the local market and spot the opportunity.

4. Turn an economic crisis into an advantage: Within a year after starting distribution and sales business, Sukhpal noticed mushrooming of

competition from big players based out of Dubai.

He found that the local supermarkets began to impose harsh terms of trade. His sales dipped.

Then came the exodus of 2014 due to fear of Daesh.

The suppliers left in hurry and the local traders and supermarkets were without suppliers. The big names such as Carrefour and Holland Supermarket chain started to reach out to Sukhpal. "They offered easier terms," than previous and Sukhpal grabbed it with both the hands.

"These big players need reliability, and that is what I provided

them," says, Sukhpal.

5. Show your humane side during trying times: The rebuilding activities in conflict zones also attracts human sharks who prey upon innocent blue-collar labour.

During the past 15 years, many Indian labours were lured with false promises of big salary by the employment agents.

They pocked lakhs of Indian rupees from individuals and dumped them across Iraq and ran away.

With limited jobs and no money- the labour is left to fend for themselves.

"Nearly every day people show up at my shop," seeking a job. says Sukhpal.

He further adds, "I give them Indian tea and light refreshments that is the minimum I can do."

Sharing a similar story Sadiq says, "during the 2014 crisis I provided shelter and food to multiple groups of jobless Indian workers in Erbil."

6. Pivot along with the changing business environment: Both the Indian entrepreneurs have changed their business model to meet the evolving market conditions.

Post the oil price bust of 2014; Sadiq diversified into telecom industry.

According to Sukhpal, “there are many challenges in importing assorted food” in a single shipping container.

Sukhpal

(Sukhpal Singh - founder of 'Shma' - a chain of supermarkets in Iraq)

Instead, he would like to import a product in an independent container, however, for that he needs to scale up his business.

He aims to open hypermarket stores offering Indian products and food across the Kurdish region.

His son, Kiran Deep Singh has joined him after taking a break from his Engineering degree.

A conflict zone throws multiple challenges, including lack of safety and security, to overcome this entrepreneur need deep resolve.

However, once bitten by the thrill of doing a venture in conflict areas it is difficult not be lured into the next opportunity in a crisis.

(The author is founder-CEO of AskMentor with businesses in Iraq and Afghanistan. Views expressed are personal.)
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