Solving Problems Through Entrepreneurship With Fouad Sader

Thomas Green here with Ethical Marketing Service. On the podcast today, we have Fouad Sader. Fouad, welcome.

Hi Thomas. Thanks for having me.

It is my pleasure. Would you like to take a moment and tell the audience a bit about yourself and what you do?

Sure. Well, for the lack of better words, I am an entrepreneur. I’ve been doing this for the past 13 years officially, but I’ve probably been meddling with entrepreneurship for almost all my life. So since being in school trying to sell a few basketball cards and posters and whatnot and getting scammed as well as that’s when you get your first hours of training. I’ve started three businesses in the past 13 years and I’m starting my fourth, as we speak, we’ve already where we’re on something. And the company I started recently with my co-founder, Bruno Patel, has to do with education. We’re still kind of in stealth mode. We’re part of the on deck founders program in Silicon Valley.

So more to come on that later. Most of the businesses I started were not tech businesses, but this one is a tech business. So I am a huge proponent of entrepreneurship, self-employment. Starting your own business is big or small.  I was the opinion of going for the larger the bigger home runs and we’ll talk about that later, but uh, I think it’s a great risk not to have your own business, especially in the 21st century and mike is yours? Well, thank you very much for the introduction. You said that you were, shall we say, entrepreneurial in your younger years? Do you put any meaning from that at all because I know that some people are very interested in, you know what age you started showing entrepreneurial traits do you think that’s significant in terms of how you ended up doing business or is it now?

What’s your thoughts there? Well, it is significant in a way, I’ve always had the propensity to plan things and to be interested in making money and there’s nothing wrong with that, although it’s kind of looked at as a bit of a taboo now in society, you know, Yeah, businessman or, but I’ve always been interested in the business world and making and how many, how money is made. And that led me to look into different problems that I can solve. It wasn’t the way I looked at it at first, I was looking at things if, okay, how can I, how can I make some money there? ah As you grow though, you start putting impediments for yourself and employment seems to be the safest drought. your, your peers are quick to super shoot towards that as well. You know, everybody is getting a job, you get paid with minimal, let’s say risk, although it’s still risky and most people don’t want to admit that nothing is safe, You could lose your job, you the company can go bankrupt and you could lose everything.

Even government pensions can go to zero value as, as we’ve seen in many countries before, so nothing is risk free. You only have the assumption that it’s risk free. It may be short term, lower risk, but it’s high risk, on a longer timeline. So it has had an influence on me, my earlier ventures, but then I stuck as an employee for about 10 years. I hated that. And then I thought, okay, that’s, that’s it for me, I’m gonna give up the fake safety if a multi big check and start something I’m willing to risk a lot for. Did you have any mentors when you were younger who showed you, you know, they were, they had their own business or was everyone employed around you?

Most people were employees around me, but I was fortunate to work for some small business owners. And I learned a lot from them. Some of them were negative mentors, as in, I saw what they didn’t, that I shouldn’t do, okay, that they committed large business mistakes and these were very important lessons for me, a couple where important mentors in the sense that they did something that I thought it was very impressive at that time. And I tried to copy their business model when I first started. Now reality is when, when, when I after I started, I realised that you can’t exactly copy someone else’s model eventually it will break somewhere different, times different clients, different situations and that what may appear to be perfect for you from the outside is not perfect.

Was once you’re practicing it, but you learn along the way and you get better quickly if you’re willing to consider mistakes and failure as lessons instead of, you know, slapping your safe and your yourself on the face every time you make a mistake and not really learning from it. Well, I would like to ask you about your other businesses and your progress and what you learn. But I am conscious of talking to you about topics that you would like to discuss. So what’s your preference? Would you prefer to talk about your story or would you prefer to talk about while it’s riskier to not start your own business? Well, let’s start with why it’s riskier not to start your own business. And I like to, I like to always draw on what of my fellow countryman Nassim Taleb, the author of Black Swan.

They also wrote anti fragile and a couple of more successful books. He calls just asymmetric risk. And to just if it is if you’re making a bet, I would The possibility of 1 to 10 return, you’ll eventually end up making a lot of money or being successful with your bets, however they, if they’re not money related that is. But employment is the inverse of that. You’re not taking much risk presumably because you’re sticking with an employer and you’re trying to keep that career show me on a CV so that everything looks good, but the times are changing and it’s not how it used to went automation and the quick progress of AI and robotics. The future is going to be very different 20 years from now.

It already is much, much different than what it used to be 20 years ago. Times now are moving much faster. Technology is taking over the world, careers are changing very quickly and people’s jobs are at risk. We know what’s coming, we don’t know when, so there’s no precision on, say when cars are gonna, are gonna replace old self driving, cars are going to replace old drivers, etcetera, etcetera. But that’s sort of automation is going to hit almost every industry. So competition is gonna go tougher for jobs And eventually wages are gonna go lower unless you’re in the top one, top 2% of your profession. Uh, on the other hand, as an entrepreneur, your much more grounded because you’re seeing developments with your clients and you’re reacting faster than a company would, so you’re adapting,  your product offerings, your services and uh, you have with one client, I hope and that means you have a diversity of sources of income.

And with this massive globalization, you’re probably getting clients from different countries and different industries. So if let’s say recession hits the UK. Today ah you’re still doing okay with a few other clients based in the US. Or in Asia. So that’s generally my thoughts around it. It’s also important to highlight that. It’s not that risky. It’s not that risky to start a business at least not in the modern world. where you know perhaps there are a few countries where you have we could get in a lot of trouble if you start a business and it fails. But in most modern economies that’s not the case. You have limited liability. you have some sort of protection provided that you’re not committing fraud and you can always go back to the job so you can take a year off and go after that project that you’ve always been interested in.

And money is easy to get by. Now. If you have an idea, that could potentially benefit millions of people. Venture capital is the way to go. You find venture capital firms in almost every country today. Ah There are accelerated programs that can help those who are just getting started. I could mention on deck accelerator od X. B. Index dot com. That is that is something to look into. If you’re going the venture way and if you were looking into starting a small business then you don’t need much. You can started podcasts, several websites using WordPress will, Shopify or Web flow and either start as a freelance consultant with the experience that you have from your current job and line up with you clients or start another form of business.

So it’s really not that difficult. but you know, taking the dive is, and I hope people who are listening to us today are encouraged to take the dive. It’s interesting because there were some things when you proposed the topic that I wanted to get your clarification on and it’s mainly because I had changed my position on this somewhat from thinking that everyone should go into business and be an entrepreneur to when you actually go and do it. And also, you know what the statistics are maybe that’s maybe that’s not quite the same, but the way you position it with qualifiers for example, you know, for example, if you were to already being a job and let’s say you’re a part-time job but you started a business on the side part time as a freelancer or for example and also with all of the technological changes that making it easier for everyone.

I mean, that does sound like a very reasonable proposition. I am interested in what your thoughts are regarding, what you said about How it’s changed 20 years ago when you started versus now, would you have the same position 20 years ago as you do now? Or is it very much based on the fact that innovation is speeding up and things are going to get very different in the future than they are now. What are your thoughts there? Well, I had an optimistic outlook on entrepreneurship back then as well, but it was not at level I have today, so I was pretty impressed. And I can still recall with DHL and FedEx back then, you know, and the ability to send emails and communicate with companies over the internet.

And I remember thinking, oh, it must have been really hard having a business 20 years ago when, you know, you didn’t send something overnight to Europe or receive a package in 48 hours from, let’s say New York to Jeddah Saudi Arabia where, where my business was based and that’s where I lived for quite a lot of time. also communication used to be much more difficult. My parents used to talk about the telex. I never so a telex machine. I used the facts myself and most of today’s youth have never seen a fax machine. So, so I think progress really helps, but I’m also with your position that it’s much easier now to actually take that risk even as a side hustle, the famous term now, and I’m not a big fan of the word hustle, it’s much easier now.

It’s less risky. It’s possible to promote yourself and you could go really small. That is, that was not the case when I first started, you couldn’t go really small. You couldn’t start a business with a couple 100 bucks, at least not where I was. You couldn’t easily try and connect with customers by building a guerrilla marketing channel, like a, a podcast or a social media uh, channel were a mailing list. These things where, but still done through traditional advertising and promotion agencies and marketing companies, etcetera, etcetera. So, and I spent close to a decade in branding, advertising and marketing firms because it wasn’t that easy to start a business.

So yeah, my position would be slightly different. Although I’m still quite optimistic then on entrepreneurship. So, I mean, coming back to, I mean, all relevant when you first started your, your first business because you had three of them, what did that look like? Oh, that looked pretty impressive for everyone else. But, but the, the founders, So yeah, that was, that was a, a small design firm that four of us started and we weren’t really sure what we’re gonna do. We were from the background of advertising and marketing.  one of the co-founders was from print production, etcetera and we decided to do something related to advertising, just go after clients try and get jobs.

But that eventually became a signage design company. Boy finding Systems, basically where we consulted, designed these systems, eventually starting a facility because we couldn’t find the ones that would produce to our specs using designs that we’re into off the shelf. And that turned out to be a pretty big opportunity because we end up designing, what became the design standard for all signage in Saudi airports deployed at 24 airports when I was still at the company. I eventually took an exit offer from my partners and that was my first exit.

Um so yeah, and during that business the same my partners and I also found another opportunity because an RFP came to us by mistake and we thought, okay, maybe we can, I spent some time working on this, but because the contract and the opportunity was so big, we ended up starting another business because of that, it was a safety equipment business supply to the oil industry in Saudi Arabia mostly from the US and Europe. And that only happened because we were in the game. So you can’t really get these opportunities if you’re sitting on the bench you need to be playing the game for business for this serendipity is to kind of line up as they say, luck favours the prepared mind if you were actually working, if you’re open to opportunities when Le Clyde’s up, you actually benefit from it.

So I took an exit then from both these businesses and started a third business and I was in construction. So I thought, okay, how difficult can this be? You know construction contracts are big and profitable and I have a lot of contacts in the industry, let me start this business, had no experience in architecture or engineering. So it was a very bumpy the beginning the first two years especially, but that eventually became profitable. We worked on industrial projects, commercial projects, residential projects. Yeah, I learned a lot from that. We could expand on that when if you have specific questions. I think that was the most valuable training I received in business working in construction.

And that’s because you work with all types of people told you work with traits, people who were less educated let’s say than you normally would work. Say when you’re dealing with a marketing agency and you have to adjust your approach to make things work with them and for them. And then there are different lines of ah hierarchy is they’re separating management from the people on your work sites. So things can go bad really quickly because you can’t be in all these places at the same time. It’s very different say from running an agency with 50 people in one office and the number of people who are working for you very quickly scale.

Even if they’re not directly under your employment there, let’s say subcontractors of different trades, you could have one project with 250 people working at a given time. Three projects of these, you have close to 500, close to a 500 person operation. And if you’re the leader huh or the CEO and specific, you’re responsible for pretty much everything. Yeah. So I learned a lot of lessons. There are a lot of some very expensive lessons as well lessons on leadership on hiring. and mostly through the mistakes I committed, I wasn’t particularly good at hiring people in the beginning, especially that I did not understand these trades really well. I also didn’t know how to measure success for the people I hired, but I had to quickly learn and adjust.

And I also had to understand how these relationship dynamics worked with my team, my engineers, subcontractors and the people that work for them. So you have to think of everything from protecting the wages for people who are not directly under your employ, the employees of your subcontractors because if you don’t when it hits the fan of you’re in charge, it affects your project, it affects your reputation, Everything just tumbles. So there was, that was a very big adventure for me. I eventually learned that you can scale a construction company at high speed. You want to scale a construction company, you get a project, you issue a guarantee beyond you hired more people And you keep repeating that for 30, 40 years and that’s when I decided, that’s what I want, not what I want to do and you’re stuck to one broke out one on geography.

So I worked out an agreement with my partner, then I took a renowned deal and decided to look into something else. A new adventure that’s when I decided to do to get a master’s degree ended up doing one with HC Paris and was a full online program. Ah and that’s when Covid started. So I was lucky it was an online program because everything became an online program at that point. That’s where I met my co-founder, Colonel Patel, who is based in San Francisco, we became friends very quickly and we started meddling with the idea of eventually starting something after we graduated and here we are doing that. Now. Well before we get into the details of the new business, I did have some clarification questions.

So in your first business, you got an offer of an exit. Was that a is that a positive thing for you? Did you feel good about the fact that you could get out or what were the details there? Well, to be quite honest, there was some conflict between the partners at that point. And we had, well, we didn’t design a framework, and it’s largely my fault. I was CEO. We didn’t design a framework for resolving differences in vision and tactics or strategies between the partners. We also didn’t have, let’s say, a clear partner’s agreement that that detailed how we would resolve such conflict, whose vote would overrule, etcetera.

So things became very uncomfortable for a few months prior to that offer. So I was quite happy to take it at that point, ah I no longer wanted to be in a setup where things became unfriendly. So, you were happy to go, but it wasn’t necessarily a positive experience. What do you learn from that now? Well, always, well, first to begin with, be very careful when choosing a partner. It’s like a marriage and you’re likely to be stuck for at least 10 years with each other. So that’s the first lesson. Number two have clarity on equity from the beginning have investing agreement because people’s motivations change and when they do, you know when they do and you don’t see that partners are putting an equal effort into the venture, you’re going to become resentful and when these things don’t get resolved?

It’s going to destroy the business relationship. So yeah, vesting agreement, clear terms, a clear model for compensation for people who make the most effort. These are the things I learned from there from that I did speak to. I’ve had a lawyer on the podcast before and he said that the biggest mistake that entrepreneurs or business owners make is that they just do sort of handshake agreements, they don’t put things in writing. So there’s another reiteration of that point you made, you talked about the second business, but we need we need some more details there. What’s the second business? How did that come about? And I suppose how did that go? Yeah, the second business was an industrial slash safety equipment supply business and that came about because one of our clients sent an RFP package which was quite large and we weren’t supposed to get it, I think because we’re not we weren’t getting rise for that sort of business with them.

But when we spoke to them, they said, hey, if you can send a proposal, we’ll be happy to entertain it. Yeah, so we made a few calls, I made a few calls at that point, two companies that I knew of in the US and quickly managed to get the proposals and data sheets together quickly was like three weeks and we sent in our proposals a few months after that, we received an award. We weren’t expecting it at that point. And when we got that, we found that now we have a new operation to manage because it was we had to deal with its logistics with when different sorts of finance challenges or credit instruments etcetera.

And in the end the opportunity was big enough to allow us to explore. Other clients were looking for the same products in the market where we existed. So I signed a couple of deals with companies in the US that made our life much easier because now we had more product offerings to clients in Saudi Arabia and we set up a sales team that we started exploring more customers and that became very lucrative and potentially the most, I think it was the most profitable business that I ran in terms of margins. So there exists because you get sent a request presumably with a budget.

So they said like this is our budget and you think maybe I can do that, that’s how that business existed. Yes, it’s fascinating, isn’t it? It is, it is. Did you presumably you had your partners in the second business were different from the first or did you? Okay. Yeah, interesting. Yes, but we decided to fund it from the first business and yeah, that was also probably not very in retrospect, not very wise, we should have, you know, you should have had clear lines there as well. We should have set up and new agreement around that instead of another handshake. But while overall it turned out to be positive, well in some instances your like existing businesses can lead to other perhaps businesses which have a higher barrier of entry. Do you think that’s relevant there? Can you rephrase the question? I think I missed part of it. So some businesses are very difficult to get into unless you have some sort of initial funding or some background that help you.

Yeah. Yeah, definitely. Well, in this case, for instance, we were already a registered vendor with that client and we had gone above a certain threshold of billing. So we were on their system that they’re very big oil companies. So everything is pretty uh systematized there. We were categorized at the level where we qualified to actually do that job or get that that offer. So and the same thing happened as well in construction when I first started, I was getting very small jobs because I had no portfolio when my team and I were all pretty young and didn’t have much to show for. And then we ended up, you know hiring people with more experience who could, where we could leverage their experience when we’re pitching for something.

And then we also built a portfolio that made it easier for us to get jobs. We essentially built trust some sort of trust for, for future customers. So the, or either of the first or second businesses, they’re still around, do you know? Yeah, they’re, they’re all still around and you, you’re, you’re separate from them now. You don’t have any anymore. Okay. And how does the, the exit from the second one happen? The second one was part of the, it was, it was a deal with the first one as well. So it was a combined deal because they were the same partners. And I think we all decided that it’s time to part so. And your construction company, which is your third business, what were you building? Eventually, we weren’t building much. We were just doing renovation works, electrical works and stuff like that. And then we started building out small facilities at airports because I had existing relationships with, with clients.

So small fuel stations and temporary residences and that sort of stuff, security rooms. And then we grew into building parts of commercial, uh, properties as well as 1, 1 of the larger projects was at the Jet International Airport that was infrastructure works. And eventually we, we focused on residential. Uh, and uh, that was, it was quite a change in terms of types of clients and this type of challenges that you deal with. But it was also more personal or interesting. And how does that come about the third business? Sorry, if you’ve already said it, I don’t recall how you how you got into it. Oh the well it’s also kind of a line because I had seen that some opportunities existed with my conversation with existing clients.

So I already had a network of people and they had some work available. I knew if I could put a crew together already had trust established with some of them I could take some of these projects. But it also happened that I couldn’t get as a foreigner, I couldn’t easily get a license and business license for and advertising or a marketing firm. That’s what I was intending to do at that point. They had basically said we’ve issued enough of these and unless it’s you know I think it was construction and something else. I don’t remember what the other thing was. These are your choices. I was working with a lawyer back then. Yeah and he said well you know there the opportunities at the time it’s becoming more and more difficult for us to get a license now. So these are the two choices.

What are you picking on like okay construction let’s see how we can go with that. So these are these are challenges most people who are listening to the show now will not have starting a business in the UK is a 10 minute process. and the same thing applies in the US a bit more complex in some European countries, but it’s also not highly restrictive. So yeah, listeners, please, you know, build upon desire for cheese. That is amazing though, the fact that you got a couple of options and presumably the construction company was, it sounds quite successful based on the number of people that you had on projects. And as you said, it was scaling quite quickly, you made something quite significant from the restrictions that you had. Is that how you interpret it as well?

Yes, I do a precise interpretation. I would say, yeah, it’s fascinating. But I did want to pick up quickly on the hiring, that you mentioned the fact that you made some hiring mistakes and the mistakes. Very, very good to learn from, but also the solutions you get from that for going forward. So, have you got anything to share there? Yeah, sure. Well, when you’re, when you’re working on in an industry that you don’t understand yet, first I would say try to work on an industry that you understand. Well, that’s it for lesson number one. If, and if you don’t have that chance and if you’re excited about something that you still don’t understand, that’s fine, as long as you’re passionate and driven, uh, but then try and consult with people who have an experience there when hiring, primarily, you need to focus on how you measure success for these candidates.

And one would think, hey, it’s easy, You know, let’s say you have a sales team, you focus on sales numbers, etcetera, but it’s not the same if you have a project management team and civil engineers, architects, people on the field foreman and supervisor superintendents, how do you know that they’re doing the job right? How do you know that,  that you’re measuring the right things you initially don’t, so try and figure out what these metrics are very quickly. And in the beginning you have no choice but to work on a very tight Turn around whatever one. So I would recommend daily meetings instead of weekly ones with, with key decision makers in your company. So you’re constantly getting updates, constantly asking the right questions.

Also keeping a very tight loop with customers and clients so that you’re getting any feedback about things going wrong rather quickly. It’s not going to make sense that you’re on, you know, you’re, you’re on every job site for instance and construction at the same time, you’re going to try to do that. But that won’t work. That’s why you’re hiring a team.  and also be very selective about the people you hire. So developed a rigorous,  way for testing people if you can test candidates on projects basis or freelance basis in the beginning, even if it’s more expensive, do that. So, you know, starts with the dating period and then, uh, and engagement period before, before plunging in and when you’re hiring try to hire for what you believe is a good fit for the next year or two?

Not the next 10. As a small business, it doesn’t matter if you get of finance manager who’s a 20 year veteran but I can’t get you has great connections and has seen it all big and small but and basically gets you a small credits point. That’s the thing that you need right now. So you need to, on one hand look at the long term perspective of things. On another hand you need to keep that long term Kind of ah Framed properly 12 to 24 months. These are the people that you need. These are the skills that you need. This is how much you can afford and keep reassessing also do you will have to fire people. So when you know that someone is repeatedly failing the company, failing their colleagues, failing their clients and the culture of the company culture, it’s time to let them go.

Don’t keep that thing dragging because you’re just not experienced and firing people. That’s how everybody starts. I wasn’t experienced at that. I’m not saying it’s fun. I’m not saying being sensitive about it. Of course not but you’re not doing anyone. Any goodbye. Sabotaging the company and the rest of the team? That’s a good point. So how does the third business, how does that exit look like for you? So that wouldn’t want what I would call the soft exit. I still own some shares of the company. I took an earn out, paid over three years for, for another part of the shares and my partner in the business assumed ownership for, for my shares with, with an initial investor.

But what, what happened at that point was, I knew I no longer wanted to be in construction. I said, okay, let’s, let’s figure out a deal where ah, we don’t blow this up and uh, that the period of, let’s say transition period is long enough for you to be comfortable with keeping the operation going and keeping everything together, hiring people where For, for the responsibilities that let’s say I was assuming. And we figured out a deal where I left the company after 12 months from the first from when we’ve initiated the talks without massively affecting the company’s cash flow in and one hit. And yeah, I then went on a soul searching for a long period of soul searching.

Education after that though, right? Yes. Yeah. But, but during the education, there was a lot of sort of soul searching as well. I don’t know much about the new business. So would you like to share a little bit about that and then also about what your goals are for the new company. Sure. Yeah. Well it’s very early stage. We’re still validating the hypothesis of what were we working on? We’re currently part of the on deck  founders program. It’s starting next week. And what, what we’re working on at the moment is related to income sharing agreements. So what we want to, I don’t know if you’ve heard of them, but it’s a new type of financing model, especially in education. And our goals are basically to help today’s underdogs become tomorrow’s champions through higher education by giving them access to funds that they otherwise wouldn’t have.

We believe it aligns the interests of the investors. So what we’re building is essentially a marketplace and it aligns the interests of the student, the investor and the educational institution together. Happy to expand on, on anything if you have some questions there. Well, in terms of what your motivations are, is that more around philanthropy or is it for profit? Or is it just sort of happy medium? Do you get both of them? It’s definitely the for profit. But it’s also huh purpose driven because we both colonel and I, I thought a lot about this and we don’t want to be stuck with something for, let’s say the next seven or 10 years that we’re not passionate about. And at that point, we decided to do something related to education, but then we quickly learned that academia is even more bureaucratic than governments.

So their sales cycles are extremely tedious and political. So we looked into other problems or other challenges that students face at and after talking to a couple of dozen students, we found that most of them had some sort of financial challenge, getting their degrees either uh some challenges, let’s say getting the necessary financing for the last two years or the last year. So they had to stop learning, studying and then maybe work for a sinister and go back to school, etcetera, which no, which prolongs things for them. While others simply didn’t go for the school of their choice because they couldn’t afford it. And we think that income sharing agreements are a good alternative to let’s say bank loans or ah other sort of commitments that don’t give you the guarantee of what an income sharing agreement does.

So basically, if you don’t get employed with the degree that you’ve earned, you don’t you don’t have to pay anything. It’s contingent on getting a a job of all the above a certain threshold granted it is, it is, it is a form of debt, but it’s contingent debt. So that means we have to vet the institution and make sure that their programs actually gets people employed and our investors are going to make sure that are algorithms are selection criteria for the students themselves. give them a good level of safety when they’re investing in that person’s future a good way to look at it, it’s like venture capital, but instead of going into a company, it’s going into an individual and it’s on a fixed period instead of perpetual interesting.

I can see, I can see it’s very scalable. So if it doesn’t work, you could, you know, you could impact a lot of people that way. Well, I’m interested to know how it goes. So do let me know how you get on with it and I’m sure there’ll be some more learnings and I appreciate what you’ve, what you’ve shared today because I think there’s a lot of good lessons in there. Is there anything I should have asked you about? No, I don’t think so. You feel like it’s a form of therapy, have you gone through the whole business lifecycle? It is, it is, I, I can, I can fairly say so yes, it’s a, it’s not always, it’s not that I don’t do this very often go through the whole process of retrospect the past decade or so, but it’s always quite valuable for me to share these lessons and I hope that people actually learn from my mistakes so that they could commit their own.

I mean they’re still gonna commit mistakes, but if you can afford to, if you can avoid mine and save some money there, that’s better and some money and some, some hair, I guess. If people want to connect with you, where do they find you? Well, it’s best to find me on LinkedIn and my LinkedIn is Fouad Sader. Also available on medium and I try and write a couple of articles a month. That’s

Thank you very much.

Thank you very much, Thomas. It’s been a lovely conversation.