The Abu Dhabi SME Hub is conducting a series of interviews with SMEs that, with support from the Khalifa Fund, are excelling within their respective industries.
The SME showcased this time is Abu Dhabi-based Anigma Computers, an e-commerce platform for specialized and high-performance computer hardware aimed mostly at regional gamers.
Launched in 2016 by avid PC enthusiast and investment manager Abdulla Al Jneibi, Anigma Computers is catering to the ever-growing PC gaming industry and the needs of individuals and organizations that require top-tier computers.
“What we do is basically put components together in a well-packaged bundle - whether it’s for gaming, graphic design, simulation, engineering, etc.,” Al Jneibi said. “We package it in a way for the customer and we fill a gap between the branded PCs - or the branded computers and laptops - and between the more or less the small computer shops here that sell purely components. We fill that niche in between those two.”
As for why he started his business, Al Jneibi said that he “grew frustrated with the lack of technical knowledge in computer shops. At the end of the day, most of those computer shops [were operating] because they found a niche that no one was addressing, and so they started doing business. They’re a trading business at the end of the day… [PCs and parts to them] are a commodity to be moved as fast as possible."
Essentially, he realized that these sellers weren’t exactly educated about what they were selling - they were just trading a desired commodity, which worsened the consumer experience. Therefore, Anigma Computers was born of a desire to sell high-performance PCs and parts to consumers while simultaneously educating them about the purchase and customizing the service and product to their needs. Given that many of these high-end PCs can range from around AED 10,000 to AED 40,000, there is certainly a need for customers to make educated purchases.
According to Al Jneibi, his company specializes in assembling and selling two different PC builds: straight builds, and liquid-cool builds. The first uses traditional cooling, through the use of fans for example. The second type of build, however, is more “tricky,” utilizing a liquid circulation system to cool the CPU. These PC builds, as Al Jneibi puts it, require “a little bit more craftsmanship” to pull off, which as a service is not as available as it should be in the region.
Amid the craftsmanship and dedicated customer service the company offers, Al Jneibi is trying to grow Anigma Computers into a venerable brand in its respective market.
“It’s an identity, we’re not just a computer shop,” he said.
Abdulla Al Jneibi, founder of Anigma Computers
As with any business, especially one that is fresh and still finding its footing, there are many challenges of all kinds to consider.
“The first issue was really perfecting the business model. In order to make this a successful business, we had two routes open to us. We either go the computer shop route, which is low margin, high volume transaction-based business model. Or, we go with a little bit of a higher margin, lower volume business model. We opted for the latter.”
“The perception from a lot of people was that ‘You’re selling me the same stuff that I can buy from other retailers.’”
As a result, the first step for Al Jneibi and his team was spending a lot of time educating consumers.
“What we found was that a majority of the customers… appreciated that they now knew more about their purchase. Remember, some of these customers pay upwards of $3,000 for machines that will stay with them for years. So, they not only appreciate this fact, they also start referring [their acquaintances] while actually becoming repeat customers themselves.”
In terms of the other challenges, Al Jneibi mentioned that building a team was another notable one, as hiring people with the right caliber of expertise at the right price in their industry can be quite difficult.
Additionally, as an entrepreneur starting a business, having to handle everything yourself at the start is quite time-consuming. Eventually, you need to delegate, and it can be hard to let go initially.
On the financial side of things, “I wouldn’t say it’s been challenging in a negative sense - it’s actually a good challenge,” he said. “The most challenging aspect that we have is really just getting enough working capital to manage our inventory, manage our operations, and make sure we’re growing at a pace that is acceptable for me and for the company. That’s been our biggest challenge so far, I would say, if you wanna talk in concrete terms. All the other obstacles are soft challenges that you can deal with at any time.”
Eventually, Al Jneibi realized that this issue was more critical than he’d thought. He initially had funded the whole company from his own finances, with eventual financial support from the Khalifa Fund. However, he soon realized that he miscalculated how much capital he would actually need “to grow beyond the initial phase.”
“The money that we requested from the Khalifa Fund was well thought out - I did the feasibility study myself. We went through it with the [KF personnel], but it was only meant for the initial set-up. It didn’t take into account that at some point, we’re set up, we have the team, we have the network, we have the infrastructure all in place, now we need to pour gasoline on the fire - we need to inject more money to get more inventory, to get more business, and so on and so forth.”
“This has been challenging, especially for Emiratis. On a personal basis, I can go to the bank, and tell them I’m a government employee, I need a personal loan. They’ll more than gladly give me 20-30 times my salary, which is sizable enough for you to do with it whatever you want.”
“But once you go in as a company, and tell them listen, ‘this is my business model, these are my financials, this what I’m doing, this is how much I need to grow and achieve my business plan,’ they look at you and are like, ‘Okay, you remember that rate that we were talking about? 2.5% interest rate? Now it’s shooting up to 9% or 10%. You’re a business and you’re in an industry that’s risky.’ You start to get into all these discussions with the banks…”
Khalifa Fund support
For many Emirati entrepreneurs like Al Jneibi today, this is a challenge. Banks don’t offer the same confidence that a development fund like the Khalifa Fund would. As an enterprise development support entity, they’re dedicated and are used to helping businesses and taking a risk with their owners.
“The Khalifa Fund obviously has a different approach,” he notes. “My process with the Khalifa Fund was pretty swift. They’re quite supportive. They look at the entrepreneur, they look at how serious he/she is. They look at the idea, see if it is well thought out, if there is passion behind it, and on that basis they decide to approve a loan/grant.”
“Having a fund like this that really supports entrepreneurs - especially Emirati entrepreneurs - is something to be proud of. I’ve worked in different government entities, which are typically very bureaucratic - there’s no real person behind it. The Khalifa Fund takes a very different approach. They really care about the entrepreneur.”
The UAE: A healthy business environment
As for the benefits of launching a business in the UAE, Al Jneibi said he “wouldn’t start a business anywhere else.”
He cites the majority of government services which have been made available online, making setting up a business as easy as ever. He also notes the large pool of talent available in the country: “You have a lot of people from Asia, from Western countries, Arabs - whatever it is that you’re looking for, you’re more or less very likely to find that expertise here.”
“There’s also a lot of support from a government point of view in terms of supporting SMEs, especially during the past year approximately. A lot of fees have been waived, a lot of support has been given to SMEs, in order to make their journey much easier. I don’t think a lot of countries offer this.”
“For us, it’s the perfect place to be.”
While it can be difficult to let go of responsibilities as an entrepreneur and to instead learn to delegate, an inverse problem exists as well, Al Jneibi said. In this instance, entrepreneurs have given away too much control, or were never in control in the first place. In this scenario, business owners lose touch with what’s happening with the many facets of their business.
“This typically happens not because of a mistake, but due to complacency,” he said. “Any entrepreneur needs to have a solid reporting mechanism to be able to really keep an eye on what’s happening,” Al Jneibi reminds, especially in terms of finances.
“You have to be on top of things, you have to be aware of financials, you need to be very aware of your business plan and the goals that you want to achieve, and then work towards them. You have to really work on [your] business plan. It’s not a document that you can assign to someone to fill out. You have to really own this document and be able to recite the business plan from heart.”
Another lesson he has learned is to “make sure that the goals set by management are made clear to the staff on the ground. This is an issue that you see a lot of the time, where management has great plans, but the staff who are actually handling the day-to-day operations are not aware of these plans, or they’re generally not aware of the KPIs put in place.”
Looking forward, Al Jneibi is focused on expanding his company as much as possible.
“What we’re planning on doing is working more on the brand offering, meaning that we’re not just putting together off-the-shelf parts. We’re working on our products, on our own branded products, whether it’s in factories in China or Taiwan or the US even. We’re putting our own spin on it, because ultimately you don’t see any of the global brands really caring about the consumers here in the same fashion that they care about the American or Chinese consumer.”
He continued: “It’s a much smaller market - both the population and target market are much smaller. Regardless, it’s definitely growing, but we haven’t seen that the brands are really pivoting as fast as possible to address the requirements of the consumer base here, which is an opportunity for us.”
“We want to sell our products abroad, we want to sell them not just here in the UAE. So, the next plan is mainly focused on expansion in different markets, whether physically or electronically, and working on product development, branding, etc.”
Based in Abu Dhabi, United Arab Emirates, Anigma reinvents how gaming is done in the Middle East by providing gamers in the GCC with the best gaming PC components and accessories to make sure that their gaming experience is complete. To learn more: https://www.anigma.com/