Economics and Policy
Consumer confidence in Lebanon remains the lowest compared to its regional peers despite marginal improvement, a new study has found.
Brent crude jumped to a six-month high, rising more than $3 to top $114 a barrel and sent equities worldwide substantially lower Tuesday as Western powers considered a military strike against Syria.
Alistair Hughes, owner of Savoir Beds, is explaining the role of the royal bed in late 17th century England, which was apparently more than just a construction to sleep in — it was a symbol of the monarchy. “Charles II would travel around the country with a vast bed,” he says. “His friends would all sleep with him in it and courtiers would bow to the bed whenever they entered.”
Hughes is giving context to Savoir’s latest creation, the £125,000 ($192,000) Royal State. Only 60 of the beds will be made and three have already been bought by Qatari clients. “It is truly a magnificent piece of work. The labor intensive mattress and box spring cost around £70,000 [$107,000], the frame £50,000 [$76,000] and the crest £3,000 [$4,600],” he says with unerring self-belief. “This is our homage to historical tradition,” he says. “And by the way, Charles II’s bed would today cost £30 million [$46 million], the equivalent to ten London town houses.”
Hughes and his partner bought Savoir, the company that makes the world’s most expensive beds, from the Savoy Group in 1997. “Back then it was called the Savoy Bed Works, a company that was founded in 1924 and had previously been called James Edwards. When we bought it, we called it Savoir as a nod to the previous owners.” And no doubt the fact that he and his partner “knew” what they were doing.
Bedding the customer
“I started with two and a half men and a sewing machine,” he laughs. He now makes 600 units annually, with a turnover of £7 million ($10.7 million). This figure excludes the Royal State beds, which if sold would generate revenues of £7.5 million alone ($115 million). The regular range — again excluding the Royal State — cost between £7,000 ($10,750) and £70,000 ($107,000). Half of Savoir’s beds go abroad with 10 percent ending up in the GCC. Frank Sinatra owned one, Emma Thompson loves them and the King of Morocco ordered 24 after sleeping on one.
Surely they can’t be that good. “You might think paying thousands of pounds for a bed is a lot,” says Hughes, “but our entry level bed works out at around £1 [$1.5] a night over 25 years. Our customers, 70 percent of whom are private individuals, have no complaints.”
Savoir has just opened two showrooms in China and one in Qatar, where he is still working out how to encourage couples to “try” beds in what is a traditionally conservative region. “For couples we are considering closed off areas, and we are training female staff so women shoppers can feel more comfortable.”
Lebanon, with its affluent and discerning consumer base, is also on Hughes’s radar, and he is toying with the idea of opening a showroom in Downtown Beirut.
For anyone wanting to try a Savoir bed, they can be found in the Riverside suites at London’s Savoy Hotel. “You would be amazed, considering how much they have to endure, how little hotels invest in beds,” says Hughes running through a list of the some the world’s most famous establishments and how much each spends on their mattresses. “Don’t quote me on those figures but let’s just say the international average is £300 [$460]. It’s quite staggering when you think about it.”
He admits that the beds, while at the very pinnacle of luxury items, are not toys in the way that cars, boats and watches are. Still, he was thrilled to hear that in a recent poll conducted by a men’s magazine in which women were asked what was sexier: a man who boasts he drives a Maserati or a man who sleeps in a $20,000 bed, the majority opted for the latter. Now that’s a selling point.
Economics and Policy
The Turkish lira was headed for the weakest level on record Monday as the central bank provided funds to banks at its benchmark 4.5 percent rate for the first time in six days.
In more bad news for Ankara, Abu Dhabi National Energy Co. may shelve a $12 billion power project in Turkey amid a deteriorating economic outlook and increasingly difficult financing conditions.
The Egyptian pound strengthened on the black market on Monday as fears the country might be sliding into a period of sustained violence eased after a protest Friday passed relatively peacefully.
Jordan’s largest lender, the Arab Bank, announced this week that a New York federal court has dismissed more than 90 percent of the claims in a long-running lawsuit accusing it of providing banking services to charities and individuals allegedly affiliated with Palestinian militants.
Abu Dhabi’s new luxury mall The Galleria at Sowwah Square opened its doors on Tuesday, bringing more than 50 new fashion labels and several new food and beverage brands to the capital for the first time.
The mobile gaming industry is notoriously risky: in a market estimated to grow to $12.3 billion in 2013, a game can make millions or it can get lost in the sea of apps. With profits from mobile games ranging widely from zero to over $1 million a day, much of what makes a game go viral still depends on luck. But a readiness to formulate a strategy can pay off.
Lebanese game development and launch company Gamabox — half of the group that brought us the hugely popular dystopian killer chicken game Birdy Nam Nam — has been experimenting with mobile gaming apps. With two game launches under their belt as Gamabox, co-founders Souad Merhebi and Jean-Christophe Hoelt have been able to draw some lessons about how best to tackle this tricky but lucrative market. “Every day thousands of new games and apps are published. It is hard to get noticed — you have to build a strategy,” says Merhebi.
The company was founded in March 2012 and brought Himzu Bavitch onto the team as an illustrator. A year later — in February — they released the mobile game Ali Hood, which played on a cross between two popular heroes: Ali Baba and Robin Hood. The strategy to market Ali Hood relied on media, review websites and forums — low-budget forms of advertising. Though the game received considerable attention and Merhebi put the number of downloads in the thousands, she did not want to talk about the specific revenues as it did not achieve the success its creators were hoping for.
Merhebi and Hoelt established the company in 2012
After their experience with Ali Hood, in July the company launched Baby Goo Puzzle. This game is designed for children aged from 11 months to three years to solve small puzzles, and was released in Arabic, French, English and Spanish. It has already received positive reviews and has seen considerable success in the French market, with Gamabox already receiving half the return on their investment developing the game. They expect to make a full return within the next three months.
Picking the right model
How a game can thrive in the market is a question asked by mobile game developers everywhere. One thing Merhebi stressed was knowing and adapting to your market, since a good idea is not always enough. “There are many great games that are well done, addictive, yet which still don’t make it,” she says.
Many games’ success is contingent on being there at the right moment. Merhebi says that this can be tapped into “by looking at market trends and seeing if a need exists.” Merhebi and Hoelt realized that parents were looking for puzzle games for their children after spending time with some of their friends whose children loved physical puzzles. The idea came to them to design a game for a phone or a tablet, and after looking in the app store they saw limited competition. Baby Goo Puzzle was developed within a month, which allowed them to release it shortly after identifying the market need.
Making money from online games is a challenge, especially when many games are offered for free. An additional difficulty is pirating: according to Merhebi when Ali Hood was sold at $1.99 per download, only three percent of downloads came from the Appstore and Google Play whereas 97 percent were downloaded illegally. Merhebi, however, believes that paid games can offer more to the customer because they are of better quality, well-polished and consist of finer ideas.
To get money from games requires knowing what the market is willing to pay for. One thing that distinguished Baby Goo Puzzle was that it was launched on a freemium payment platform, where the download as well as the first four out of twenty levels of the game are free — with a cost of $1 to access subsequent levels. Merhebi and Hoelt were happy with Baby Goo Puzzle’s conversion rate of six percent — meaning six percent of people who downloaded the app paid to unlock the extra levels. According to Merhebi this is twice the average global rate of three percent.
The monetary success of Baby Goo Puzzle made Mehrebi and Hoelt decide to re-launch Ali Hood using a freemium model. Merhebi and Hoelt are in the process of collecting analytics to refine the game — in particular looking at user feedback. Much of this was positive, but there were also comments that, for instance, some levels were too hard while others were too easy. To make sure their market is receptive, they are testing new versions of Ali Hood by releasing slightly modified versions under a different name. These versions will be released for a short period of time until they gather enough user feedback.
With high hopes for Baby Goo Puzzle and a determination to revamp Ali Hood, Gamabox is a games platform to look out for in the next couple of months. They are currently talking to Lebanese investors to get outside funding for their games — which up until now have been produced without external money. Though they did not specify the investors, they said that the amounts they were seeking would be enough to launch four to five games. Considering a game in the mobile market can cost between $10,000–$250,000, this could amount to a sizeable amount of cash.
Economics and Policy
Iran will stop paying monthly cash handouts to citizens who don’t need the aid, Shargh reported Sunday, citing a member of parliament.
Elsewhere in Iran, the country's new oil minister has said the country is being hurt by high oil prices.
Sudan earned at least $230 million in fees for the export of South Sudanese oil this year, official media reported Sunday.
Egypt’s premier said comments by International Monetary Fund Managing Director Christine Lagarde acknowledge that Egypt needs assistance.
Falafel Games is behind one of the most popular online games in Arabic, Knights of Glory, with around half a million members. On its website, the firm states its aim is to “design and produce the best games of the Middle East, from the Middle East, for the Middle East.” Yet while its core market is the Middle East and North Africa, the management is from Lebanon and Syria, and its strategic partners are Beirut-based venture capital firm Middle East Venture Partners and the Dubai-based MBC Group. Falafel Games is based in Hangzhou, a city of 4 million people some 40 minutes west of Shanghai by train.
Located on the top floor of an office block in the city center, it would seem a surprising choice of location for a company that needs employees to speak and write Arabic to interact with customers.
The lure of the far east
So why did Lebanese co-founder and Chief Executive Vincent Ghossoub and Syrian co-founder Radwan Kasmiya, who was behind Arabic video games Quraish and Tahat Al Hasar (Under Siege), set up shop in China in 2010 rather than opt for say the Dubai Media City, the programming hub of Bangalore, or anywhere else on the planet for that matter?
The short answer is that Ghossoub, after graduating from the American University of Beirut, initially went to Shanghai in 2007 to do an MBA and study Chinese, liked the place and wanted to stay.
The office is a mix of Chinese and Arab workers
“To give a more objective reason, the business we do can only be done in China or Europe. It is not about programming cheaply — if you want that you go to India — but we need art, story boards and pretty high-end programming,” said Ghossoub. “In fact, 75 percent of global production of online games within our category is done in China.”
Falafel Games has a total of 22 staff, with three working remotely in Syria. In Hangzhou, in addition to Ghossoub and Kasmiya, there are three Syrians involved in customer care and Arabic language content of the game. The company also has one Chinese employee that speaks Arabic, and is soon to employ a second, while the rest of the Chinese staff are involved with the artistic and programming side of the game. “Hangzhou is pretty convenient to find Chinese Arabic speakers as it is near Yi Wu, a major trade center that attracts Arab traders, where there are a lot of Arabic speakers,” said Ghossoub.
When it comes to attracting Arabs to work for the company, Yi Wu again was a resource pool, while Hangzhou itself has its own appeal, renowned as a tourist destination for its West Lake and parks. “It is not difficult to find Arabs and a nice place to live — a quiet life, you don’t need to spend much, and one of the most beautiful cities in the country; there is even a mosque,” said Ghossoub. In terms of attracting programmers, Hangzhou has one of the country’s best information technology (IT) universities, and is a less competitive IT hub than Beijing or Shanghai.
The characters may look Middle Eastern, but they are designed in China
Salary wise, Chinese and Syrian expatriate staff are paid similarly, “although the lower end of the Chinese [salaries] is lower than Syrian expats’ and the higher end of Chinese salaries is higher than Syrian expats’,” said Ghossoub. He added that the company would not easily have brought together a similar team in the MENA, “which actually makes our savings almost infinite.”
Operating in China is three times more expensive than it would be in Syria, but two times less than in Dubai. Staff travel costs were around 7 percent of overall staff costs in 2012, and for executives on business trips less than 5 percent of the marketing budget.
Working with Chinese companies is also straightforward and efficient. “The Chinese have great work ethics, and leaders of companies are workaholics, and want profits, so [they are] easy to work with and [offer] good service,” said Ghossoub.
Setting up the business in China was fairly straightforward, and no local partner was required. “The bureaucracy here is, if I have to compare it to the MENA, somewhere in the middle: worse than half the MENA and better than the other half. It’s not trendy to say that, but the little errands needed to set up and run a company are done through clear procedures and no corruption,” he said.
With the core business online, physical proximity to the MENA is not a necessity, but promoting the game from China can be challenging. “As far as collaborating with the ecosystem, and getting marketing at an industry influential level, it’s not that easy, as we can’t sit down and have coffee with media people or collaborators as we are at the end of the world. We have overcome those issues at conferences and events, and catch up on all the coffees we miss. But I only need to take with me a memory stick, and don’t have to take a big bag of samples to show anyone,” said Ghossoub.
Economics and Policy
Deposed Egyptian autocrat Hosni Mubarak has been flown out of prison by helicopter, freed after more than two years in jail, with no convictions against him.
International business consultancy groups pay great attention to developments in global wealth and luxury markets. As yet, however, the Eastern Mediterranean region has not been researched or measured against other luxury markets, and, presently, studies of the Middle East and North Africa focus on trends in the Gulf Cooperation Council states.
Given the widening divergence between the rosy economies of the GCC and the gloomy ones of the Levant, it will be of little value for Lebanese luxury vendors to know that consulting firm Bain & Co estimates the regional luxury goods markets to be worth 6.3 billion euros ($8.37 billion), or 3 percent of the global market for luxury goods.
According to Bain, over 40 percent of the 6.3 billion euros are generated in the United Arab Emirates alone, which together with Saudi Arabia, Kuwait, Qatar and Bahrain account for over 90 percent of the MENA region’s spending on luxury goods. This assumption leaves a very humble pie for vendors of luxury goods in other MENA countries including Lebanon, even when taking into account that the definition of luxury goods used by Bain is restricted to items of hard luxury — such as jewelry and watches — and soft luxury goods — fashion, perfumes, apparel and so forth. The Boston Consulting Group includes travel, hotels, cars, spirits, dining and spa experiences in its definition. The group’s research measured the contribution of luxury goods and services to the global economy to be near $1 trillion in 2010.
One result of Bain research will be of interest to retail organizations in the region: upscale shopping malls have been a smashing success for marketing luxury goods in the Middle East. Dubai Mall is a particularly big magnet for big spenders, accounting for about half the luxury market in Dubai which in turn represents 30 percent, or about 2 billion euros, of the regional market by Bain’s reckoning. That means that Dubai Mall achieved luxury turnover of 1 billion euros ($1.32 billion) in 2012.
Regional growth trends for luxury markets are hard to identify when the data is so thin, but Bain expects “important growth” for luxury in the Middle East in 2013. It says this expansion will be driven by economic growth, new malls and a dual apptetite for “traditional local” and “global luxury brands” from younger and mature consumers alike.
As far as global numbers go, Bain sees an overall trend of slower growth after three years of double-digit annual increases from $153 billion in 2009 — a low caused by the global financial crisis — to $212 billion in 2012. Bain expects 4 to 5 percent global growth in 2013, meaning that luxury will exceed $220 billion this year. The further forecast is for the luxury goods industry to turn over $240 billion to $250 billion in 2015, with a compounded annual growth rate of 5 to 6 percent in the next two years.
The mystery of luxury
If this data on overall size and concentration of regional luxury markets is to be trusted, the Lebanese market for goods of splendor in 2012 must be measured not in billions of dollars, but in tens or hundreds of millions. The actual annual value and growth of Lebanon’s luxury retail is a mystery, and information on specific sub-segments such as hard luxury or fashion seems to be a function of marketing more than transparency, judging from always-upbeat but also uncomfortably vague remarks by market players whose voluntary declarations on business performance appear to be focused on saving face.
An alternative means to assess the health of luxury markets is to pore over through the plethora of wealth research reports, which discuss the evolution in the numbers of high net-worth individuals (HNWIs) and families and their behavior. Providing similar entertainment values to watching royals and celebrities, wealth reports additionally provide some insight to behavioral economics and business relevance for investment advisors and anybody targeting HNWIs, from charities to retailers.
The profile of the global HNWI population is changing in ways that have implications for the business of luxury, says the most recent edition of Barclays Wealth Insights, which the London-based banking multinational published this summer based on research conducted in the first half of 2013.
Central aspects to the change in the HNWI population according to Barclays are the shifts from developed to emerging markets, a trend that has been receiving a lot of attention, as well as a perhaps less conspicuous shift from inherited to acquired riches. Surveying HNWIs from countries representing five world regions on the sources of their wealth, Barclays found that only 26 percent named inheritance as the main source and compared that with 25 years ago when 79 percent of the rich in the United Kingdom were heirs.
Thirty-eight percent of Middle Eastern survey respondents — nota bene all from the GCC as per the report’s maps — identified inheritance as the source of their wealth, the highest rate in the world. Leading answers for the sources of wealth in the multi-option survey were savings from earnings and personal investments, each named by over half the global respondents, followed by profits from operations or sale of businesses and profits from property. In the Middle East, 41 percent of respondents said a main source of their wealth was gained from sale or operations of a business but, as Barclays noted, technology was not the fast route to the billionaires’ club in the region that it was elsewhere.
Behavioral implications of self-acquired wealth are more focused on control or hands-on engagement, greater familiarity with risk and on qualitative issues in the approaches to succession planning and to the sharing of wealth. At the same time, providers of luxury experiences and goods will be satisfied to learn that the HNWIs in the Barclays study named expenditures on lifestyle and experiences as a top use of their money — across all age groups.
The findings that various global wealth reports provide on the Middle East indicate that the region, along with other emerging markets, has seen an increase in its population of billionaires and millionaires. The latter group, the much larger of the two, is commonly understood as representing greater economic importance to luxury retailers because demand for most luxury goods categories is driven by the aspirations of rising wealth earners and recent HNWIs.
Opening the gates
Located on the doorstep of Asia’s emerging wealth and a traditional recreation ground of wealthy Arabs, Lebanon is in a favorable position to be a luxury retail market. However, the picture is ambiguous.
An important driver of luxury spending in the region is tourism. Even as hotels and travel are not included in the conventional definition of luxury goods, tourism, according to Bain, is a key driver of luxury markets in the period through 2015. Strong inbound tourism to Dubai by-and-large explains the city’s rise to become the regional hub for jewelry among its many other hub functions.
The centrality of tourism to luxury applies profoundly to Lebanon, a country whose domestic buying power is codependent on receipts from foreign visitors and from remittances — but the current implication appears to be negative. Revenues of high-end Lebanese retailers and commercial real estate operators in 2013 leave no doubt that receding trends in demand for high-price goods and services in places like downtown Beirut are correlated with the plunging number high net-worth visitors from the Gulf countries.
Given Lebanon’s twinned reliance and vulnerability vis-à-vis extraneous factors, it seems not unreasonable to expect that development of its luxury markets will be decoupled from up-trends in either global or GCC luxury markets as long as detrimental security risks are buffeting the country. Investments in luxury goods, plus cars, pleasure craft and real estate on the other hand have potential to grow irrespective of global economic environments, once the pressures have been lifted. For the moment, outbound tourism and escaping the dread of local realities seem to be prominent drivers for Lebanese luxury consumption in a time of ongoing conflict.
A boss can silently let his fellow colleagues know how he gets business done. A bespoke suit along with a crisp dress shirt and pure silk tie is for those businessmen that run the company in a classic manner. The specific cut of their suit parallels the defined lines of the corporate structure.
“Around 75 to 80 percent [of customers] prefer suits,” says Ali Nasser, manager at luxury menswear store, Pal Zileri based in downtown Beirut. “For the classic look, there are three types: classic, sport-chic, and casual.”
In the classic category, you’ll find single and double-breasted suits, along with dress shirts and ties. Globally, the double-breasted suit, popular in the 1980s, is back in fashion and was spotted on the runaways of Milan during the Fall 2013 Fashion Week. In Lebanon, explains Nasser, the style is viewed as outdated and a man in a double-breasted suit is viewed as unfashionable, when in reality he is in keeping with the latest global trends.
In every businessman’s closet you are likely to find the classic, standard, solid colored suits, alongside suits with a bit more flair. “The customers take a black, blue, and gray suit for the whole year,” says Nasser. These solid color suits can have different looks by switching out the shirt and ties for $450 and $250, respectively.
Aside from solid colored suits, a businessman can show off his own personal style by choosing plaid printed blazers and colors and patterns that match. “Italian style [is mixing] gray, with brown, navy and blue. People with this style usually buy suits more often,” explains Nasser, because people in the office might notice if the same ensemble was worn over and over again.
Along with its ready-to-wear collection, Pal Zileri also provides top-notch services in customized tailoring. “We have a tailor that comes from Italy twice a year and he takes the sizes of all our clients. Then he goes back to Italy and he makes the suits,” he says. “It takes two months to make them.” However, this service is exclusive to a select few, “about 15 customers” states Nasser, and with reason, as prices range from $4,000 to $10,000 for one suit. “The customers take about five to six suits every six months. So each customer’s bill amounts to $45,000 to $50,000.”
In addition to handmade Italian suits, an affluent Lebanese businessman’s outfit is completed with top-of-the-line accessories such as Hermès silk ties and Berluti leather shoes.
Casual, but always chic
Yet, not all wealthy men always want to dress formally, and, high-end fashion also includes casual wear. “The remaining 25 percent [of customers] are divided between casual and sportswear,” Nasser says. “It becomes a question of how you will relax.”
According to Janis Sarraf Tabet, brand manager and buyer for Malia Moda, member of Malia Group, businessmen go to Paul & Shark, another retailer of high-end menswear, for items to wear during the weekends and at laid back outings as the brand’s products are casual, but carry gravitas.
The casual-chic look has the advantage of combining the formal feel of a traditional suit with a more casual and comfortable twist. “This is the sport chic: blazer, pants, and a shirt. It’s still classic, but without the tie,” states Nasser. Tabet says Paul & Shark shirts are their best seller, along with pants and jeans. But “not jeans with washes, never. Just simple blue jeans with…very small logos or stripes.” Shirts and polos cost from $200 and $250. To complete the look, you can add a sports blazer from Pal Zileri for $700.
Other brands also realize the importance of casual clothing that still meets the high quality found in luxury brands. Italian brand Hogan is currently launching its latest campaign, titled “Casual Business”. The shoes in the line go for around $370. Businessmen not just in the Middle East but all over the world are slowly transitioning to a more relaxed look that maintains a chic and serious form.
With all the possibilities, it is up to the boss to decide which look he will advocate. The look should not define who he is, but complement his characteristics and his personality. After all, those who truly appreciate fashion do so for the quality it offers and understand the value that it holds beyond its name.
Abdallah Absi has been creating start-up enterprises since he was 17, an age at which, he points out, he wasn’t even legally allowed to own a company. Four years and half a dozen (largely unsuccessful) business ventures later, he has combined his knowledge of the pitfalls of new enterprises with his impressive contact list of potential investors to found Zoomaal; a pan-Arab crowdfunding platform launched last month.
Zoomaal allows users to acquire funding for their venture by securing multiple, small donations from the public in exchange for a range of rewards. It is a slick, local variant on the booming Kickstarter brand; the US-based funding platform which has raised $714 million and counting for more than 45,000 creative projects since its launch in 2009. Like Kickstarter, Zoomaal is purely project based; all campaigns have clear end dates and equity stakes are never on offer: “The projects we work with are generally still at seed stage. Equity-based crowdfunding would only work later on, when you have a proven model and are looking to grow your business,” Absi explains. It also follows the “all or nothing” funding model. If a project fails to reach the target figure it set for itself, the money pledged is returned to the donor. Zoomaal only takes a 5 percent commission on successful campaigns.
The difficulty of transferring money online is perhaps the principle reason why Lebanon has so far not embraced the crowdfunding model. Zoomaal’s solution stems from dogged determination rather than any particularly novel solution. It supports all the largest regional payment gateways, and has circumvented the difficulty of returning non-credit card payments by creating online accounts for contributors; if the project you choose to fund is unsuccessful, the money is added to your account balance and can be reallocated later on.
Abdallah Absi started his first company aged just 17
It is a clever solution to ensure the circulation of capital, but it has its limitations. Non-credit card investors will be frustrated not to get their money back, especially users interested only in a particular project.
Local issues have also been leapfrogged by registering abroad. Absi says the Lebanese banking sector was concerned with the potential abuses of crowdfunding, such as channelling donations to banned organizations, so the company is legally registered in the United States, where there is more familiarity with the set-up and the safeguards it provides. Despite this, it exclusively promotes projects from the Arab region.
That there is a demand for crowdfunding initiatives in Lebanon is hard to deny. “Angel investors don’t exist in the region unless you have family who can fund you,” says Absi. “Bumping into a stranger who falls in love with your idea and decides to fund it? That doesn’t happen.”
Absi says the difficulty of securing funds elsewhere is the main reason most of the 300 plus projects so far submitted have turned to Zoomaal for consideration. But some of the first few projects on the website based their decision to use Zoomal on other factors, and are particularly ambitious. Lebanese local Leen Sadder hasn’t lacked potential investors for “THIS Toothbrush”, a prototype which packages the ancient tooth cleaning stick, the Miswak, in a hygienic tube with a cutter attached. But she chose to go the crowdfunding route to try and raise her $18,000 investment, a figure which far surpasses the $5,000 Absi says projects should have to retain a clear focus and manageable budget. Sadder has had several meetings with both venture capital financiers and representatives of the dental industry, but preferred to stick with Zoomaal. Finding investors “would be the next step, but right now we’re not ready to make that commitment.”
Crowdfunding also makes sense for Sadder because she sees it as a logical continuation of her product’s growth so far. THIS Toothbrush found fame in cyberspace when New York-based design magazine Core77 spotted the prototype, which had been created as university coursework and largely forgotten about, on her website portfolio. Their article prompted others, and the Miswak found itself at the heart of unexpected online hype. “We wanted to make it an organic product, and we felt that we could use the support we already had to make that happen,” Sadder says.
Sadder’s $18,000 target may seem ambitious, but it pales in comparison to Zoomaal’s biggest venture: Mashrou3 Leila. The popular Lebanese band is looking to secure $66,000 — of which Zoomaal would receive $3,300 if the venture is successful — to launch their new album “Raasuk”. Like Sadder, they were not short of alternative options. “In the past two years we’ve created enough buzz to get major industry talking to us, but every time it’s the same,” says band member Firas Abu-Fakhr. “They’re interested but want to change some things to release commercially.”
To ensure that their Arabic-language pop isn’t swamped by auto-tune and belly dancers, they turned to crowdfunding. Presenting the campaign as a broader fight on behalf of artistic integrity, they are appealing to their fans to fund them in exchange for a sliding scale of pre-release musical perks. Abu-Fakhr says the band was ‘seduced’ by Zoomaal’s exclusive focus on Arab content, and by the prospect of launching their campaign in conjunction with the website itself. Of course, they accept it’s not a long term solution. The hope is that if they can create enough impact with the launch, international independent labels will start to take an interest, or local labels might perhaps rethink their demands.
Averaging roughly one donation per 30 viewers of the project online at the halfway point in their 38 day funding window, it seems likely that Mashrou3 Leila will reach its target and the commission taken from that success could allow Zoomaal to expand beyond its current ‘bootstrapping’ team of two. The buzz around the band, as well as Sadder’s project, has also boosted Zoomal’s early social media presence. With a vibrant cultural scene and widespread interest in supporting the arts, there is no doubt that both supply and demand for the crowdfunding model are plentiful in Lebanon.