Zilzar, Silicon Valley and the Muslim World

rushdiWhere risk is appreciated, encouraged, and rewarded, innovation will thrive and imitation will naturally diminish and eventually die. The country will diversify and develop (better than grow), and capital markets will lead the banking sector to developed country status.

Today, 22 of the 57 Muslim countries are the least developed; three Muslim countries, Indonesia, Saudi Arabia and Turkey, are part of G-20, and none are part of BRICS, Brazil, Russia, India, China, and South Africa. Furthermore, not one Muslim country is part of the 23 country based MSCI World (developed market) Index. Finally, today, the Muslim world is better known for the political hotspots than “hot” patents.

The Muslim world, as a whole, has flattered the “west” by imitating, but reverse engineering cannot be a sustained industrial or private sector policy, and time has arrived to take lesson from west and be flattered by them. Surely, there are many non-natural resource innovators in the Muslim world of two billion and counting.

Innovation culture

Innovators and inventors are there, but the culture of innovation is not there. It starts at the home, continues through school, and is reinforced and practiced at the government, finance, capital markets and corporate levels.

For example, if we take example of Malaysia’s methodical approach for both Islamic finance and Halal industry, started in 1983 and 1974, respectively, we see the end result today, global hub for both areas. The fact there is minimal convergence between the two is ripe for discussions at the upcoming World Halal Summit.

There are lessons learned from my 17 years from Dow Jones Indexes, Thomson Reuters, Azka Capital and now Zilzar Tech. In that period of time I have had missed steps, some achievements by luck and others by thought through planning and execution, hence, an opportunity to share with the young people starting or expanding their ideas, prototypes, and start-ups.

One of the important lessons for any country, especially emerging market countries (all Muslim countries) is to understand the importance of the three most important stakeholders in developing a country to a knowledge-based economy. The first is the youth, then the entrepreneurs, and finally the SMEs. They want to contribute, hence, access to risk capital (finances ideas and prototypes), information (equalizer), connectivity to community (other like-minded) and technology (transformative).


A start up business or introduction/expansion of a new division of an established company, is composed of five elements, PLATM (pronounced platinum):

1. Plan – what is the problem you are solving? What is the business plan for making money, from advertising sales to transactions, and over next five years, hence, delivering a return on investment (ROI). Furthermore, the second element, in the e-commerce space, is cost of acquiring a user (dollar spend) and their lifetime revenue generated minus cost of acquiring them and attrition rate. The cost of acquisition should 10-15% of the lifetime revenue generated.

At Dow Jones Indexes it was about having the first Islamic equity index by a global index provider that allows existing Islamic equity funds to be benchmarked to an Islamic index, and providing transparency to the screening process to achieve Shariah compliance.

At Thomson Reuters, it was about information efficiency to “conventional standards”, hence, the Islamic finance gateway, launched by Bank Negara Malaysia governor Tan Sri Zeti Aziz, brought all the relevant stakeholders, products, pricing, and news on one platform.

At Azka Capital, launched by former prime minister Tun Abdullah Ahmad Badawi, it was about consolidation (or roll up) strategy of SMEs in the halal sector that are scattered, small, and requiring economies of scale efficiencies.

At Zilzar, launched by Prime Minister Datuk Seri Najib Razak in Dubai at WIEF, it’s about a trusted, meaning vetting and monitoring, e-commerce platform for products, services and information in the Muslim Lifestyle marketplace to bring buyers a “peace of mind”. Today, not many people understand that e-commerce platforms are for buyers safety and populated by sellers (which should be trusted).

2. Landscape – what is you business and the industry you operate in? Is a Rolex a watch or men’s jewelry? Is a Harley Davidson a motorcycle or about lifestyle? It makes more sense to be in a growth industry that is US$10 billion than US$500 million! It makes more sense to be early player than be the 15th player, let’s call that the “white space”, otherwise you will get the left-over crumbs on the table.

At Dow Jones Indexes, Thomson Reuters and Zilzar its about empowering users with updated and trusted information and connecting them to do business seamlessly, be it licensing, lead generation or actual transaction. It should be understood the most valuable commodity in the world is not oil, dollar, gold, etc., but information, as all the respected jurisdictions have laws against inside information trading.

3. Adoption – for investors it all comes down to how fast you grow your customer base (and its stickiness) and the revenue they generate, which also means moving the conversation away from (margin compressing) pricing to (entry barrier) USP attributes likes “integrity”.

At Dow Jones Indexes, we had close to US$7 billion managed by licensed asset managers, Islamic ETFs, Islamic structured notes, etc., against our indexes, hence, much more than competitors. At Thomson Reuters, the community population expanded and they contributed to content, which helped with sales of the terminal business and up and cross sell.

At Zilzar, without any funds spent on digital marketing since the launch in 2014, it comes up as number one when user types “Muslim Lifestyle Marketplace” in the Google search engine. The area of digital marketing (bringing traffic to website content) for the halal industry will be explored and addressed by Zilzar’s Head of Digital Marketing, Jupiter Huidrom, at the World Halal Summit.

4. Team, the human assets, from top management to the tea-lady, has the most over-used but under-utilised word linked to it: “chemistry”. It’s not just about educational and background qualification, but long has the top management worked together, especially in a start up environment, i.e., a horizontal chain of command. Investors are not parking their money in PCs, iphones, offices, and outsourcing, but the team’s passion, energy, working beyond the comfort zone, taking calculated risks, etc. So, it’s an investment in people and not hardware.

At Zilzar, our office has layout of Silicon Valley offices, like Google; an environment the encourages “outside box thinking”, encourages people to “meet beanbags” to relax, discuss and debate in our “war room”, etc. For example, we recently hosted about 50 MBA students from Berlin, Germany, as they wanted to see the “silicon valley”‘ set-up in Malaysia.

5. Money – do you have “skin” in the game? The investment at earliest stage is seed money (prototype), then angel investing (reduced some business model risk), and then first to various rounds of funding (expansion). The sweat equity alone may not be enough to get, as smart money, today, has many people chasing it.

In the Muslim world, the perception is that Gulf investors have the money, but they have a real estate and private equity mindset, hence, start-ups may be based there because of demographics, but from funding outside.

To date, we, Zilzar, have utilised our own funds, as that sends a message to the marketplace of investors, potential recruits (yes, we are hiring, including interns), competitors, and the stakeholders of the Muslim Lifestyle Marketplace.

Silicon Valley

In the west, “failure” is a badge of honour (they have tried and learned form their mistakes), but in the east, “failure”, is the career impacting (or even ending) badge of shame.

It’s time to start to change this defeatist “mindset”.

Thus, a private sector silicon valley start-up culture and environment does exist in the Muslim world! Now, through the passage of time, effort, resources and policies will innovation and invention arrive and, Insha’allah, thrive.

To create, one has to lead by example, and to lead, one has to create by example.

Source: The Malaysian Insider

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