By Neil King
Paul Kenny found start-up success with daily deals website Cobone.com. He talks about his e-commerce journey, his new travel venture, and what the future holds
There aren’t many people under 30 years old who have done what Paul Kenny has done.
The 29-year-old founder and CEO of daily deals voucher site cobone.com has overseen one of the region’s e-commerce success stories, selling more than 2.1m vouchers to more than 1.5m members, saving them almost AED507m since launching in 2010.
Double digit growth of more than 50 percent in 2013 has put the company into profitability, and its status as the leading business of its type has allowed it to branch out into travel, with Kenny launching Triperna late last year.
His meteoric rise sets him out as a leading light in entrepreneurial circles, and his ambition to do even more in the region makes his future career one well worth watching.
Like so many entrepreneurs before him, Kenny was born into a business family – Kenny’s Bookshop and Gallery, based in Galway, Ireland – something he credits with giving him sound business foundations, but something he was eager to move out of from an early age.
“Everybody would know us back there,” he says. “It was never a bad thing - I learnt a lot from my aunts and uncles, and so on. Everything from lifting boxes to selling books. We were the second bookshop in the world to go online, too, which was very cool.
“But I started to not want to be known for being in the family business. I wanted to be known as Paul Kenny by myself, not my family.”
Studying a masters in e-commerce, he visited Dubai in December 2004 and January 2005 on a family holiday which would change the course of his life.
He explains: “I loved the place. There was hardly anything here, but I really loved it. I started to see if you could buy books online here. Back in the UK there were about ten or fifteen companies you could go to for that, but there was nothing in Dubai. So I looked for other online shops, but there was nothing there. It was very interesting.
“I went back to finish my masters, and decided to apply for jobs in Dubai. I got a phone call from Jumeirah to start with them as an intern, so I dropped out of my masters, left everything I knew back home, and came out here to Dubai.
“I was being paid about AED3,500 per month - half what I would be getting in the family business. But I didn’t arrive for the money. I was doing offline marketing and I learnt loads there. It was great.”
Starting with Jumeirah in 2007 Kenny left eighteen months later after being refused a pay rise, moving to a publishing company where he admits he was “struggling with having a boss”.
He explains: “I wanted to do more than I was allowed, so I resigned after six months and started as a consultant with Emirates Group. That was a really cool experience - it was a great brand to work for. But soon the same pains as before kicked in. It was nothing wrong with the company, it was all down to me. I didn’t find it easy to have a boss. So I resigned again.”
By his own admission, his prospects didn’t look good: “I was a college drop-out who moved to Dubai at 22 years old, and by 25 I’d already had three jobs that didn’t work out.”
But with the working day ending at 3pm, he had been afforded plenty of time to work on his own projects, resulting in him uncovering an aptitude for online marketing and sales, and leading him to meet with investors over a new project.
He says: “I came up with an idea for a deals website and met with some investors. It was around the same time that GoNabit started, so we had to move fast, and I managed to raise $2m.
“I hadn’t had the best career path, and only two and a half years of work experience, but for some reason I convinced the investors to work with me. It was really exciting.
“I had never had a team before, never had a business plan before, so it was quite daunting to have this money in the account and having to build a business.”
Kenny explains that his first priority was to be quicker than the competition, which had a head start on his new business, Cobone.
“We had to move faster that them so we could catch up. In eight months we were bigger than them. We were growing incredibly fast.
“Now we’re three years old and one of the biggest e-commerce businesses in the region.
“We made so many mistakes along the way - hiring the wrong people, opening wrong markets - but the brand was strong. We hit profitability in 2013 and it continues to grow.”
Things took a huge upwards turn in March last year when US investment firm Tiger Global acquired Cobone in a deal worth a reported $40m, retaining Kenny and other key members of the management team, and providing additional capital for the company’s development and growth.
“That was super exciting,” says Kenny. “They had invested in emerging markets before, which was really important for us. We needed an investor who knew the complications of working in this region, and we got exactly that.”
As part of the deal with Tiger Global, Cobone was to launch a travel a travel arm. But on the back of a successful 2013, the decision was made to launch a connected, but quite distinct travel concept - Triperna.
Kenny says: “With Cobone we have maintained our position and continue to grow, but Triperna is our new focus.
“We’re so excited about it. The daily deals market is a $100m market between all players, but the travel market it worth $35bn. And there’s not one single destination people go to in the Middle East to book travel - people will go here, there and everywhere. We want to become that go-to place.
“We’re offering people something more than they normally get - packages rather than just rooms. With us you get inclusive things like late check-out, access to water parks, and things like that. We solve the problem of what to do after getting the room.”
The travel market represents a huge opportunity for businesses in the region which get it right - something Kenny is determined to do.
“Brazil has got the same size travel market as here,” he says. “It’s huge. Brazil has billion dollar travel companies, but the Middle East doesn’t yet.
“We already had a lot of leverage with Cobone. Cobone Destinations scaled incredibly quickly, so we had a great base to start from, and global competitors can’t compete with us in the local market. Being local is a significant advantage.
“Everybody in the team is focusing on one goal, and that’s a very powerful thing. Over the last year we’ve matured a lot because of this. A lot of companies look back, analyse why they haven’t hit their targets, and so on, but we are constantly looking forward and trying to reach our goals.”
Looking forward is something Kenny has had to do since deciding to start a business in Dubai - often because there was nothing to look back on in terms of advice and assistance.
“When I started I had no reference as to where an internet company could incorporate, or anything like that,” he says.
“How do you get a company bank account? It took me six months to get one. How do you get a payment gateway? There was only one available when we launched. It was very challenging!
“You have to realise the complexities of the region and adapt to them. And you have to be prepared to take the lead yourself.
“There are people who do, and people who talk about doing. One of my favourite quotes is from Michael Jordan: “Some people want it to happen, some wish it would happen, others make it happen”. We make things happen - we don’t just talk about it.”
Entering a nascent e-commerce market, Cobone was part of a tech boom which pushed the region closer to its counterparts around the world. And according to Kenny, there is much more to come - possibly very soon.
He says: “One or two things have happened in the market that define its changes. Yahoo! buying Maktoob, for example.
“In the near future there will be a couple of very big trade sales - $100m-plus sales. That will happen soon. And one internet company in the region will float soon. I think souq.com could be the first that floats.
“At that moment when more and more success starts to come about, there will be significantly more companies starting up. Now hundreds of companies are starting in the region. Maybe ten of those will become incredibly successful.”
Looking ahead at how the market will develop, Kenny highlights the growing influence of mobile commerce as a key driver.
He says: “Credit card payments will increase and there will be a different focus. Mobile payments is a huge issue. Everybody has a mobile phone and everybody is online, so that’s one thing that will increase very quickly.
“Changes in the US and Europe are more gradual, but here the leaps will be much bigger and much faster because of the investment of governments into infrastructure.
“Things are online more and more. When I arrived you couldn’t pay for du online or anything like that. Now the government is really pushing it, and you can pay for all sorts of their services online - it’s increasing very quickly.”
The potential may be there, but according to Kenny, fulfilling it isn’t an easy task given the difficulties associated with entrepreneurship in the region.
“It’s a hard place to be an entrepreneur,” he says. “The risks associated with being an entrepreneur are very, very high here.
“I was speaking at Harvard last year as part of a panel about building a company internationally from the US. We were asked what the biggest risk about doing business in our country was. People were talking about bankruptcy, and I explained that if that happened to me, I’d have to leave the country in seven days.
“If I were an entrepreneur in Europe, my business could fail, and I could still go to my house that night. If my business were to fail here, it would be much more serious.
“About 80 percent of business here are start-ups, and there is a lot at stake for them every day. Hats off to the people who start them, because it’s really not easy.”
Despite the challenges, Kenny is quick to encourage people to at least try starting something.
“There are a lot of opportunities here, definitely. I’ve been here for six years or so and there are still so many opportunities. It’s an exciting time to be here - especially as an entrepreneur.
“In Europe, everything is already developed. Here, there’s still a lot that needs to developed, and we can all be part of that.
“I’m also an ambassador for the Irish government and I tell people interested in starting a business here to come out here to try it out.
“My way of thinking is what’s the worst that can happen if you ask for something? Most people don’t ask. Without asking for things, it’s hard to get anywhere.”
Putting his money where his mouth is, Kenny and fellow entrepreneur Arya Bolurfrushan set up Emerge Ventures, an early-stage venture capital firm focused on Middle Eastern tech start-ups.
With ambitions to put $1m into thirteen technology business, Emerge Ventures is a sign of Kenny’s confidence in the region and its future business leaders.
He says: “We’ve been through everything in a good and a bad way, so we thought it would be good to apply our learnings to other companies.
“One challenge of this market is that there’s nothing to lose here, but a lot of people don’t talk to each other.
“In Silicon Valley, Google and Facebook don’t like each other too much, but they still sit down and talk to each other. The are part of the ecosystem. Here, people are trying to people their own ecosystems. We want to change that.”
For the time being, however, Kenny’s primary goal is much more straightforward; “to build the biggest online travel company in MENA”.
The way things have gone so far, you really wouldn’t bet against him doing it.
Twice bought a Fraud deal from him! I am Never using Cobone again! I even recommended the deal to friends and family, they all bought it and lost their money too! they keep reminding me of it even today~ losing thousand dirhams is not fun! The third party involved even offered us a Refund but Cobone sat firm on all our money and refused to refund! Boo to him and his business techniques!