For the latest webinar from our Lebanon Growth Accelerator’s Speaker Series, we were joined by The Good Thymes’ Fady Aziz, and Feel 22’s Maurice Mattar, to talk about expanding out of Lebanon, common mistakes (more like learnings), and ways to brave the storm that is 2020-2021.
Fady Aziz is the founder of The Good Thymes, an agriculture venture that sells a wide range of high-quality dry thyme mixes that started in 2017 as a hobby. Fady then revived a 300-year-old farm to produce his natural products. He decided to quit his job, took an abandoned school and turned it into his workshop.
Maurice Mattar is one of the founders of Feel 22, an e-commerce beauty company that started in 2016 out of BDD Beirut. They had initially focused on the Lebanese market for a while, with the goal to become a leader in themarket. Two years ago, they decided to start looking into export markets, and they’re currently also operating in Iraq, and setting up operations in Egypt.
You’ve been working on your projects for seven years, the last year and a half was tumultuous. What are the things you worked on during this time, that you adapted in order to continue in the path of existence first, then growth?
After the revolution, there were a lot of ups and downs… We didn’t know what to do, how to proceed.
First of all, we decided to continue to focus on our workshop to be able to export our products. It was extremely challenging because of the cash flow, the access to dollars.
Second, we thought: what are the markets we need to hit? What is our sales strategy? The local market took up 80% at first, now we accelerated the strategy to reverse that (80% export, 20% local). The devaluation is a very tiring topic, especially when all your operations are in Lebanon.
Finally, we worked really hard with consultants and financial advisors. That helped a lot. We took a step back, and intentionally decided to pursue operations despite the instability.
We were initially very focused on Lebanon, and became the leader in the market. Since there’s no real cross-border shipping complications, we were happy to lead in our small market. Obviously from a geographical point of view it was a risky position: we were 95% reliant on the Lebanese market when the crisis started. People tend to think that e-commerce doesn’t have much costs, but that’s not true.
Second, employee departures were a huge challenge for us. E-commerce experience is in high demand right now, and our employees have extensive training and qualifications in this space – so they were quickly solicited for their experience.
In order to retain our talent we wanted to distribute shares to our key employees. We weren’t able to do that in Lebanon, so we had to allocate a pool of shares that were distributed to 10 employees out of 40 through a foreign structure.
Furthermore, it’s not easy to export because we sell international brands, known brands that are available everywhere else. We’re now focusing on our assortment of private brands that make up a small portion of our sales. Our own brand, too. Reinventing ourselves and really focusing on doing a few things better, rather than being generalists, will help with opportunities to export. We needed to really build a roadmap on our plans for the next few years.
We had 100% of our sales coming from brands like L’Oréal. Going in with these brands into UAE and the GCC is very competitive. There are giants taking over that market.
Now, more than ever, our prices are more competitive and this is the right time for us to get into these markets. We’re growing the teams of our private brands. We’re starting to leverage the expertise of our team even more.
In a nutshell, our focus shifted from Lebanon to outside, and on smaller, more specific, growth opportunities.
If you could go back and do it again, was there some key mistake you would have done differently?
I don’t call them mistakes, I call them learnings. Would I have done something different? To be honest, no. There’s a huge learning curve. The thing is, you need to be patient. During regular days, we would have reached our destination in 1 year, but nowadays it would take 3 years.
Prioritization & focus are the key terms here: I narrowed my focus to a specific range of products, not the full range.
The Lebanese market is a small market, but a perfect market to test your products and services on. There’s less risk when it comes to that. I think that starting in Lebanon is a very important move. We are a picky clientele and audience. If you succeed and satisfy your customers here, it would be easier anywhere else. We have a sophisticated demand and a picky crew. Plus, it’s a very diverse market.
It was a good test market for The Good Thymes, it gave me lots of insight on how we can grow. If you have a solid base, you can adapt and reshape it for different markets.
Also: be attentive to who your personas are, how to be responsive to your customers/stakeholders and adjust your products.
Initially, when we went out a year into business to try to raise funds and find investors, we often heard that the Lebanese market is too small, and that we should get into a bigger target market. We ignored these comments, and wanted to be a leader here. Looking back, the feedback we received was on point. When you set up an entity, and you have the same setup and launch cost, you might as well go for the larger markets. It’s something that I found a bit disappointing initially, but it now makes sense. The key learning is that your initial idea or pitch, the potential that you’re setting, should be seen from the start. Think long-term.
Not sure if I would have done it differently, but from a business point of view maybe it was a mistake not to think about addressing other markets sooner.
How do you choose your next market? What might you improve on the process you had when you were choosing these markets?
Until now, we were lucky enough to have these markets approach us themselves, because we have a solid and powerful brand. For any entrepreneur / brand you’re creating, you need to identify your target audience and brand positioning before deciding anything. For instance, we’re in five countries now. They all approached us. We’re currently looking for five more.
The ideal process is the following: do a market study/trend forecasting (vegan, plant based products for example…) before you knock on doors.
Ease of market entry was the main pillar for us. Iraq is much easier than KSA in terms of regulations, for example. It’s a bit easier to get there than other places. One thing we look at is GDP per capita, purchasing power, and how the market would look in five years. Connectivity is a big part of the metrics we looked at. It depends on the sector.
Another crucial element, we asked our local partners and suppliers which markets they could help us move to.
How did The Good Thymes become a magnet for markets to approach you themselves?
I have 18 years of experience in branding. My passion for branding and for my brand has helped me a lot. I summarize the success of the brand with the following:
- The story
- The taste / innovation
- The branding (image / positioning / colors / graphics)
At the core, Fady built a good product. It starts with a good product. It looks good and it tastes good. Even if you have the best marketing, the best distribution partners, if you don’t have a good product, it’s not enough.
In terms of food precuts, what are the top countries/regions that you would advise to venture into? And what about cosmetic products?
KSA (also the hardest and more expensive to get into)
How do you build your brand story?
In my case, I decided that I wanted the story to be around my brand, my image, but it depends on what you want. You need to decide on a couple of keywords to decide what you want.
We built a community of beauty bloggers and influencers, and they helped us create an inclusive community.
What have we not asked you that could be beneficial?
Are we enjoying what we’re doing? Yes. Enjoy what you’re doing, don’t just do it to make money.
Maybe about tools? When we look into which markets we want to enter, there’s a very helpful tool: google trends, keywords working in volumes. That gives you an idea for which market to target. That’s usually what we look at before going to any market.
I know that’s a lot of info to take in, but I hope that this blog post and our Speaker Series webinars are helpful to you! Stick around to stay tuned for more of these. Let’s grow together! 🌻
Sara from the Bloom team