Video: How Xische was founded with $3,339

SMEInfo is one of the definitive SME portals in the Middle East, featuring inspiring entrepreneurial stories of the UAE. Our founder Danish Farhan was invited to join their Business Mentor panel and share his experience founding several businesses including Xische & Co. over the last ten years.

The full video interview is 8 minutes long and can be viewed in full on with Arabic subtitles. The English transcript of the interview has been republished below.

How did you found Xische?

I realised, having attended three different universities, pursuing three very distinctly different degrees, that there was something horrible wrong, either with me or with the education system. I decided to drop out and didn’t know much else. And I’ve always followed this paradigm where I think businesses really need to be built around opportunity, rather than what you’re good at. And having dropped out of university, nobody brands you as being an expert in any one field or form. So I thought, perhaps the best thing for me will be to explore combining an opportunity that I saw coming down the horizon.
In 2000, the world was changing quite rapidly, especially in this part of the world, whereby people were still guided very much by advertising agencies and they measured their success on the basis of return on investment of some sort, that really never linked up. The internet was about to change things quite rapidly, and that’s really where the opportunity arose and I thought, “Ok, let’s set up a web-focused agency.” When I say we, back in the day it was really just me.

What challenges did you face while setting up?

When I decided to set up the company, I didn’t actually tell my parents about it. Having dropped out, they thought I was out fishing the whole day, for months at end. And Media City was just about getting started. I happened to be one of the lucky few that walked into their offices and realised “Ok, I need to set a company up.” They didn’t have any office space, so they allocated a trade license. Back in those days, you could work from home. And it cost me all of Dhs12,256, which is all of the money I had as a 19-year-old. And I had about 8 months to pay the next cheque. And as you know, in this country, not honouring a cheque could have fairly dramatic consequences.
A few months in we realised that it was going nowhere. We weren’t able to convince anybody that we were a serious entity. We weren’t able to actually deliver any of the work that we set out to do. There is only so much you can learn with Photoshop for Dummies and Flash for Dummies, which I did. Eventually I think at the 25th hour – not the 23rd – the 25th hour, we had about two weeks for the cheque to be banked. We managed to close a massive project with a major automotive player in the country, and that led to a lease of life, if you may, and it’s really just been a journey since then. So that was the summer of 2000.

What other challenges did you face along the way?

Two years into the business, we were acquired by our largest client, which was an awesome opportunity at that point, or so it seemed. But unfortunately, that happened to become my business school, because of the hostile takeover. And as it does, everyone makes mistakes. I’ve always been of the school of thought that you’ve got to make mistakes as early as possible and while you’re still young and don’t have to pay bills and support a family, so you could fall down and start voer again.
And that’s really where we went ahead. Lost everything, practically; decided to find a legislative route to start over, but do it correctly, and that was around 2003. And that is where Xische, in its current form was born.
Challenges while we’ve progressed has been finding people. Because of the nature of our business, it’s very difficult to go out and say, “Hey, we’re looking for hybrid people.” They don’t exist. And so over the years we have built a philosophy of hiring outside of the disciplines. So if we’re looking for a designer, typically a designer on the floor has either been a strategist in the past, or has been a developer in the past, or has had nothing to do with the design industry at all.

How did you market your business?

We deployed a concept whereby we built full-blown prototypes on assumptions for clients that we thought would require something specific. We would spend a little bit of time on building that prototype, take it to that client and bet a meeting, which is not easy, but it’s a lot easier if you’ve got something substantial that’s built around them and their requirements. We went out and we hit almost every brand under the sun with something very very specific. And sort of seven out of 10 times we would be approached to do exactly that from that client because they were sitting on that opportunity or that challenge.
One of the primary principles of how we built this business has been size. We’ve deliberately always and always remained under 30 people. Every time we’ve reached a point where we’ve touched a 29 or 30 mark, we’ve spun off into smaller entities that do the same thing. Over the years we’ve had a photography agency that has spun off from Xische. We’ve had an emerging technology firm that worked on things like gesture recognition and touch screens, which really was taking away from the core of our business. We spun that off into another firm. So I think we want to keep the central idea quite focused with what we do.

How did you get involved with start-ups?

With start-ups, about six or seven years ago we realised that starts cannot typically afford to engage agencies or external partners to help them understand what their business is, what their pricing strategy should be, what their product roadmap needs to be, how they need to be branded. And so, when we started with them I saw an opportunity, about five or six years ago, to say “What if we found a way to barter our services for equity in their businesses?” And we decided to do it. It is a – and continues to be until today – a legislative nightmare, purely because of how staid and strict commercialisation structures are in this country. So we had to find our ways to do it. I wouldn’t go as far as to say it was done illegally, but it definitely very close.
So we’ve found a way to build a portfolio of investments that have been completely bought in by virtue of services.

What is the best advice you have received?

Get out of the box. And I don’t mean it in the “think outside the box.” But the moment you think that you are a specialist in something, you will never see opportunity in front of you because it does not pertain to what you think you are good at. I think that’s probably the single, greatest principle that I follow across both my personal and professional lives: become a generalist, rather than becoming a specialist. As a generalist you can find specialists in each domain to work with you to accomplish what you need to accomplish. But somebody needs to be able to come up with the idea and connect the dots.

What advice would you give aspiring entrepreneurs?

Very specifically, there is a huge challenge for SMEs, especially in this part of the world to go about perfecting whatever it is that they want to build and launch. I think my advice to them would be to set up something lean and launch in order to be able to test the concept, before blowing up into a full-blown business.
If you spend Dhs100,000 in 12 months, perfecting your prototype and then you hit the market and you realise that this isn’t what the market wants, you’ve just wasted a year of your life, and you’ve wasted a lot of money – either your own or somebody else’s. And so you really need to be able to say, ‘Let me do what I could do in Dhs10,000, spend three weeks on it and see if I am able to convince my potential market to buy this product. If that does exist, then I move forward. If it doesn’t then I have to pivot and rethink it.’
It’s not the concept of you setting up a law firm because you are a lawyer. It’s about setting up something where you can deploy the services of other experts because you found a gap in the market which really requires closing.

Watch the video interview on with Arabic subtitles.

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