Recipe for failure in the UAE

Time passes, because it can’t do otherwise. The needles and threads of the same issues and different people intersect. As a result, as a keen observer of entrepreneurial endeavors, I see refrains and trends, why certain projects haven’t stood the test of time. There haven’t been many such failures, but I dare say I learned a lesson from those that did.

3. Perception is projection

For years, I’ve been saying that Dubai is the capital of illusion. The city shimmers and blushes, inspiring wishful thinking.

“Mrs. Ada, this will sell like crazy here,” says a manufacturer of senior care products, but fails to see how few seniors there are here. Says a manufacturer of self-service car wash booths, but fails to see that no one washes their own cars here.

Just doing your homework on demographics, supposedly basic research, is somehow completely non-obvious in this city.

“I want to target my European product at wealthy young Emirati women.” When there are 75,000–150,000 of them and they are known to buy well-known brands.

For some reason, Dubai inspires the idea that it’s so prosperous that a valuable product will sell for any price. I frequently see producers, in discussions with chains, master franchisees, or agents tasked with introducing their product to retail, quote the same prices they see in European stores for production costs including shipping (fob). Perhaps in Poland, it’s a secret how much production costs in China, India, or Bangladesh, but here, no one is foolish, and the inflated prices quoted as base prices for calculating margins are laughable and insulting.

2. Copying a business model from another country

Culture is second nature to every community. I’m not talking about shaking hands or bowing to someone. I’m talking about the culture of, for example, local laziness, where we order groceries on Instagram, and vending machines don’t work in any sector. There’s no DIY at all because social stratification is too fragmented and classes are so far apart, which makes labor so cheap that doing things yourself simply doesn’t work. Business models based on linear thinking don’t work, but network thinking does.

1. Management

ALL companies that failed failed because of management. There was no shortage of customers, no shortage of money, no shortage of market. What was missing was a leader who would immerse themselves in the market and breathe its oxygen, replicate what works and add something extra.

• Wishful cash flow planning.
• Wishful sales and revenue estimates.
• No work with competitors.
• Lack of exposure to other cultures.
• Importing employees and managers without local experience.

Interestingly, when I ask, “What would you tell an Emirati who’s planning a business in Poland and wants to start by bringing five Emiratis to work in Poland?” they reply that he’d say the Emirati is crazy. And for some reason, that’s exactly what they do.