Technology is taking over the world (and the Middle East)
This is a crosspost with Boostmena.
Google was founded in 1998 and Facebook was founded in 2004. Fifteen years ago, businesses had no way of marketing themselves through the web before these companies existed. Think about that for a second. There was no way to distribute products through the web before they came along.
Today, people can create targeted advertising campaigns on both platforms to help market and distribute their product or service in just few clicks and at a reasonable price.
The changes due wrought by technology are incredible, and there's more to come. (Image via Learnex.co.za)
Apple’s first iPhone came out in 2007. That’s only eight years ago, and today, Apple has sold over 700 million iPhones in just eight years. 1.4 billion smartphones were shipped globally in 2014 alone. In 2000, there were 390 million internet users globally. Today, there are over three billion. This has all happened over a period of 15 years. Everyone is connected. They can access anything they want or need with a click or a touch of a button.
This adoption by both consumers and businesses has allowed technology to create efficiencies that never existed before. With massive adoption, businesses are able to extract tremendous value by economies of scale. They can reach their target customers faster and more effectively, and execute things more efficiently, all while drastically reducing the costs.
Technology has changed the way we do everything, starting with consuming information through the web, to transforming the way we travel, entertain ourselves, pay for things, eat, exercise and socialize. We are now at the top of the early innovation adoption cycle, with technology now proliferating large industries. Let us take recruitment, real estate and food and beverage as examples.
The future is wide open. (Image via Pinterest)
Previously, one would post a job advertisement in the classifieds section of the newspaper and pay them a fee. This advert would generate limited awareness with a tedious application management process where the company receives phone calls and a host of emails, letters or faxes at best, that would be unfiltered and take time to go through. The internet has changed all of that by leveraging the web as a “super-distribution” channel that allows the employer to target a much larger audience across a wider geography, thereby getting a bigger pool of candidates that are automatically prioritized according to their pre-defined filters; all charged at a much lower rate.
Today, these jobsites have disrupted a whole industry, creating significantly large companies. Globally, LinkedIn is massive, amassing $24 billion in enterprise value, as well as Indeed, which was acquired for $1 billion by Recruit. In the Middle East, Bayt.com is the market leader, and there are several others that have built significant businesses, including Gulf Talent in Dubai, Mihnati in Saudi Arabia and Akhtaboot in Jordan.
Real estate followed the same transformation. Previously, properties were listed on print publications and newspapers in order to market themselves for rent or purchase.
Today, the internet has shifted most of that business onto the web where brokers pay a monthly fee to list their properties for sale and rent, and target a large and relevant audience to generate leads for them. This business model has proven to be highly profitable and has created significantly large businesses such as Rightmove in the UK and Zillow in the US.
The Middle East also has its emerging players, such as PropertyFinder based in the UAE and Aqarmap in Egypt. This shift in value from print to digital has become a trend in the region, which is likely to continue as we see more people coming online.
The connectivity made possible by smartphones has created efficiencies that never existed before. (Image via Justcreative.com)
Food and beverage is another industry that is being transformed by technology. Ordering food to the home used to be done by calling the restaurant directly. Today it can be done through a simple mobile app that aggregates all the restaurants in one place and allows the user to order and pay directly on the phone.
In addition, making bookings at restaurants has become even easier, where you can do it through several clicks on your computer or through a mobile app on your smart phone. This is such a regular utility for a user since ordering food or reserving a table at a restaurant is done on a weekly basis.
Technology companies have made it so easy for the user to order and the merchant to acquire customers, and have been able to capitalize on that utility through a solid business model that is highly profitable. OpenTable is a US company that allows users to book a table online and was recently acquired for $2.6 billion, and Zomato in India, which allows users to search and discover new restaurants and menus, now valued at $600 million. We also have Talabat in Kuwait, which was recently acquired for $170 million, RoundMenu in the UAE and ReserveOut in Jordan as our local equivalents with great potential.
Clearly search and the social web, as well as the adoption of smartphones has allowed for various industries to be disrupted. This shift is going to continue. More and more industries are being challenged by technology, increasing efficiency, creating new business opportunities and building the technology titans of the future.
Evidence of this is in the fact that technology has taken over Wall Street. Today, Apple’s market cap alone (ca. $760 billion) is worth more than Goldman Sachs, JPMorgan, Morgan Stanley, Citigroup and Barclays Bank combined (ca. $574 billion). This immense value was only created over the past seven years, and is only going to continue. And now the greatest talents are being attracted by technology companies rather than investment banks, as the sector continues to become more lucrative. This highlights the demand, and the power of technology, and we are seeing it starting to happen in our region today.
We are only at the beginning of that cycle here in the Middle East, and as global models become more local and print continues to shift to the digital world, we will see plenty of exciting opportunities emerging. At BECO Capital, we have already started investing in some of these great companies, with the belief that we can build successful businesses that change industries and create even more opportunities for local consumers and businesses.