If entrepreneurial spirit is a trait people are born with, it becomes a matter of choice whether to cultivate or suppress it.
The latter appears to be what Karl Naim, co-founder and managing director at ChefXChange, an online marketplace that connects chefs with foodies looking for an enjoyable culinary experience in the comfort of their homes, did for many years.
But not anymore.
“People love this magic that happens in the kitchen,” he says enthusiastically about the company he set up with Marc Washington, a Stanford and MIT graduate, and an experienced investment professional.
He is also Naim’s friend from an MBA course on Entrepreneurship and Strategy at London Business School, and ex-colleague at Abu Dhabi’s Mubadala Development Company.
We can add to this list of high-profile posts and Ivy-League certificates the fact that Naim himself recently resigned from the position of director at UBS Wealth Management office in Geneva, revealing a start-up story has a long history behind it.
“I’ve always been used to certainty in my life, and [now] there’s a lot of uncertainty.
“That’s a bit scary for someone who comes from the corporate world,” Naim explains when asked how he steered through the difficult waters of entrepreneurship after a decade-long successful career in finance in London, Zurich and Abu Dhabi.
Born and raised in Paris, Naim, who is of a Lebanese descent, explains that he started by fitting into the “Engineering-Medicine-Banking holy trinity” expectations of Arab families.
From a bachelor degree at American University of Beirut, a master’s degree at Warwick Business School to an MBA at London Business School, and the consequent posts at UBS, Goldman Sachs, and Mubadala, his first peeks into the start-up world occurred through the lens of an angel investor in 2012.
Three successful investments in French and UK start-ups later, one of which he exited, gave him the confidence to strike out on his own and follow his passion for food. This was in 2013, while he and Marc worked for Mubadala in Abu Dhabi.
“I wish I had started earlier to be honest,” he says.
“We realised that after an MBA people usually either wanted to go to consulting or banking, which were the most coveted jobs. Now we are seeing a shift that when they come out of a business school, more and more people are actually starting their own business.”
The ‘eureka’ moment took place during a dinner the two co-founders hosted for friends.
“At that time I was actually looking at investing in a start-up that would be doing [a rent-a-chef start-up],” Naim says.
“I looked around and I saw Kitchen Surfing, but they had already closed their round. And then I left Abu Dhabi, and Mark did too, [and] we started working on it [ChefXChange] in January 2014.”
The stage for their venture was set up by fellow Millennials, whose hyper-connected, tech-savvy, and collaborative ways had already given rise to the sharing economy.
Described as having more interest in experiences than owning things, Millennials’ demand has boosted many start-ups, such as Airbnb, Uber, Poshmark, and DogVacay, and disrupted a number of other sectors that are expected to pull in as much as $335 billion in global revenue by 2025, according to a recent PricewaterhouseCoopers projection.
The rent-a-chef option has become one of the latest innovations in the sector, signaling the arrival of the sharing economy for foodie entrepreneurs.
Since 2012 when Manhattan-based Kitchen Surfing created this niche market, San Francisco-based Kitchit, French start-up La Belle Assiette and a handful of others have entered the space.
There was plenty of room for ChefXChange to join and, most importantly, secure the first-mover advantage in the Middle East.
“Dubai is our core market because we thought it was a great place to start, that there was a great need for that and because both Mark and I knew it,” says Naim.
Since the launch of the beta version of their website in Dubai in August 2014, ChefXChange has listed three categories of chefs – professional, apprentice, and amateur – with menus that can be tailored to customer requirements. The chefs can be filtered by popularity, location, cuisine, and of course price.
An average spend for a three course meal by a professional chef is AED200-250 per person, while apprentice and amateur chefs charge on average AED150 per head.
“They obviously come at different price points and this is where democratisation comes in,” Naim explains.
“A professional chef will charge more, but that doesn’t mean that an amateur chef isn’t going to deliver a great experience.
“It provides great value for money and you still have all the convenience of not having to buy all the ingredients, to cook, to serve and to clean up.”
Their analysis shows that currently chefs predominantly remain anonymous, underutilised and less creative due to working in large kitchens. Also, they are underpaid – a chef earns $20.42 per hour median according to a recent study on median salary for chefs and head cooks in the US.
Empowering chefs is, therefore, part of ChefXChange’s vision, by allowing them to increase their network, find new opportunities, and get their names out there, in addition to making additional income. Nowhere is this more needed than among people falling under the apprentice and amateur chef categories.
“They [apprentice chefs] are the new generation of people going through a cooking school who don’t want to go through it the old way,” Naim explains. “This is a great way for them to showcase their culinary skills, try out their receipts and build a network. Those people we vet by trying them.
“The amateur chefs category is more of a social-impact aspect of ChefXChange, especially in the Middle East where we’ve got these big families that have great cooks within them, those mothers and grandmothers.
“They might need to provide more income to the family because they maybe rely on one income only. So this social aspect permits them to put their talent at work.
“The way we are going to pitch it is that we, obviously, don’t expect them to come to people’s homes, but they will be able to market a specific menu every day, and you either go and pick it up or it’s delivered to your home.”
Once booked, the chosen chef arrives at your home or desired venue with the tools and ingredients, prepares the menu, serves, and cleans up. Not only is it convenient for those living in big cities, who face traffic, and often security, issues on a daily basis, which makes hosting at home more convenient, but it helps them make their guests feel more special.
“The chef is not only someone who is cooking in your kitchen, but also someone who is going to bring vibe over dinner,” explains Naim. “He/she is the one leading the orchestra and a lot of people actually love that.
“A lot of people are missing that aspect. We had a couple of stories where chef was sitting at the end of the evening with everyone just like best mates, sharing stories and similar.
“When you see the reviews of the people, they don’t rave about the food, but about the experience of having a chef in their kitchen.”
From business development perspective, starting off in the UAE seems as a rational step.
Relying on the socialising and eating out culture in the emirate, predominantly among the expats who represent around 85 percent of the population, the business model of taking a 15 percent fee from the chef’s total payment, can easily prove profitable.
However, the concept appeals to the local population around the region as it also corresponds to the deep-rooted traits of Arabian culture. “I would say that in the whole of the Middle East people are very family-oriented and very generous in terms of hospitality,” Naim says.
“We thought it was going to work well [here] because people actually like to host at home, they like to invite people over and people reciprocate.”
This year started with the soft launches of the online platform in London and Washington DC, followed by the company’s full legal incorporation in Dubai in May 2015. Naim adds that the launch in Beirut is currently under negotiation.
And as if this isn’t enough for one year, the ambitious duo have already put Brazilian city Sao Paulo on their radar.
“It’s a huge metropolis, they have money and they have security and traffic issues, so a lot of people like to entertain at home,” Naim says.
“But we won’t be able to do it alone. We’ll have to find the right partner for him to actually take the lead and be our city leader.”
Comparing price points, the selected cities differ only slightly. Naim explains that an average ticket per head in London is GBP50, in the US $50, and the price in Beirut is expected to be the same.
Nevertheless, after only few months in operation, the cultural differences have urged them to consider changing the concept in response to real market experience. “In London, for example, we received a request from a few customers to have the ability to split the bill. In the UAE when you invite at home, you invite at home,” Naim says.
“So we are having a bit of this issue. To adapt to the market, we’re going to create a functionality that when you pay with your credit card, you have the ability to split that bill.
“It’s a very different mentality and that’s why we think it will work better in the Middle East.“
The fast speed of ChefXChange’s progress is due to the co-founders’ possessing many necessary skills and tools, vast network, and initial funds.
However, Naim points out: “It’s funny that the two core skills that are needed for ChefXChange, which are tech and marketing, we don’t have. Neither Marc nor I. But we know how to surround ourselves with the best people to help us complement our skills.”
With three people in-house, three developers outsourced, and an experienced marketing professional coming on board, the team is ready for new targets, the first of which will be to increase traction.
“People think about us just for special occasions. That’s why we still need to change that perception that having a private chef needs a special occasion. It doesn’t, it’s just [about] convenience.
“We say that anyone who can afford to go to a restaurant in Dubai in a 5-star hotel can afford to actually have a dinner experience at home.”
For more exclusive clientele they’ll soon launch a premium offering, ChefXChange Black – an elite, referral only club of select Michelin-star chefs who will be available to ultra high net worth individuals (UHNWIs) around the world.
Another group of people they expect to come on board and help them make all this possible are venture capitalists.
With the co-founders’ investing $40,000 each in the first quarter of 2014 and succeeding in closing the $500,000 seed round at the end of the same year, it seemed as the following funding rounds would be an easy ride.
That’s because the support of the industry also came early on. In October 2014 ChefXChange was one of 11 tech-food start-ups invited to take part in Dig Eat All accelerator programme at the Basque Culinary Center in San Sebastian, Spain.
However, the ongoing fundraising of $2 million for their Series A round is an exercise in patience.
“What’s very frustrating when you raise, and that’s when you see the difference between the VCs here and the VCs in Europe or the US, who are much more mature, is that the first question a VC will ask you here is how much revenue you are generating,” he says.
“To which I answer: ‘If you’re asking me that question, why am I even here?’ If I was generating revenues, I wouldn’t need to come here to raise some money, right?’
“And here everyone asks me the same few questions as if everyone was speaking to each other or they just had those three questions.”
In the meantime, he praises the increased venture capital activity in Lebanon, following positive developments around Lebanon Central Bank’s Circular 331.
When asked about the final goal, Naim says that two potential paths are in front of them – to attract attention of a potential acquirer or simply build a strong team and grow the business together.
However, the talk about acquisitions and exits is shorter than expected since Naim confesses that he is ‘in love with the business.’ After high-profile posts around the world, it appears that he has found his true calling. “If we were to exit at some point, I wouldn’t go back to banking or any of it,” he says.
“I would start an incubator and invest in companies I believe in because I see how much impact we have on the economy.
“SMEs are driving the economy going forward, and with every intern we hire or person we hire, we give them an opportunity to learn or earn.
“SMEs are the way to go forward.”
For information, tips and advice on setting up a new business or insights from those who have taken the leap into the world of entrepreneurship, click on the Arabian Business StartUp section.