‘From a small shop in Amman to a global software powerhouse’

This second biographical article depicts another period in the life of entrepreneur Hazem Mulhim, CEO and founder of EastNets. 

Pivoting or completely shifting product orientation is a strategy most successful entrepreneurs pursue to adapt their vision and trajectory to shifting markets and their emerging challenges. اضافة اعلان

After Hazem Mulhim had launched his first Jordanian venture Jordanian Computer Center (JCC), a showroom selling computers in the early 1980s, he realized his first-mover market advantage was being easily challenged.

The end of the first venture

While Mulhim’s venture into computer retailing experienced early growth, cheap cloned PCs were soon spreading fast and slowing down his business.

“I realized I was just a reseller of other people’s goods, no more than a follower,” Mulhim told Jordan News. But the “cataclysmic event that ended my business would come with Saddam Hussein’s invasion of Kuwait in 1990”.

Kuwait-based Sakhr, which supplied the Arabic-English computer that was Mulhim’s best-selling computer in Jordan, halted its production of computers. JCC was now stuck with over $1.5 million of Sakhr computer inventory and hardly anyone wanted to buy them at the time.

“Eventually, I was advised by a consultant friend to offload my massive Sakhr computer inventory below cost price. I also had to reschedule my debts. Thankfully, my father would step in and shield me, guaranteeing my debt repayment to creditor banks.”

Mulhim still had to pay his debt somehow, so he pursued different new business ideas.

“In a word, this meant hustling around,” he said.

New business ventures begin

The first relative success Mulhim had next came from a low-yield tender contract with Jordan’s Ministry of Education to equip 30 schools with educational computer systems. The new business helped secure some income but it was still not enough to meet his mounting debt obligations.

During his frequent dealings with his creditor banks, Mulhim would also learn how they operated. This gave him ideas that would prove transformative later in his business career.

Earlier in his professional life, Mulhim had seen how software and technology were the true locomotives of progress.

“I started to think about how I would apply software and technology to banking processes,” he said.

“It became clear to me that Jordan’s expanding banking industry needed different networking solutions. What came to my mind was satellite connectivity.”

A satellite link was a daring idea then, but he still worked on it for months, successfully persuading leading satellite operators to come to Jordan. He also sold the idea to Jordanian banks, which initially would agree to come in as investors and buyers of the technology.

All seemed rosy at the start, but to his shock, the banks would soon cut him out and set up the operation on their own.

“I was definitely wounded by this experience, but I also learned a valuable lesson, which is to have something tangible, a product, a market and a team to deliver… and that was exactly what I did.”

Mulhim would pursue another emerging technology concept: phone banking.

“The satellite business, which failed to take off eventually, was replaced by phone banking. This marked a turning point in my business.”

His phone-banking idea took off in Jordan, and through JCC he started developing phone-banking systems. Still, as technology reseller and agent, his income was not rising enough to serve his big bank debt and its accumulating interest payments.

“This meant my search for a truly profitable business had to continue.”

Diversifying

In a chance meeting during a family holiday in Cyprus, Mulhim struck a friendship with a vacationing British businessman. His new acquaintance was developing software for connecting banks through personal computers to the SWIFT money transfer and financial messaging network, a novel idea at the time.

“I knew that this new software, NovaSwift, would be game-changing in the Middle East. Back then, most Arab banks were medium sized and could not afford to pay half a million dollars for the big computers that hosted the SWIFT technology; most used cumbersome TELEX machines for bank transactions.”

This new business idea worked and Mulhim’s business soon expanded across Middle Eastern markets and beyond. It was also then that his company’s brand name was changed, first to Eastern Networks, then later again it was modified to EastNets.

With two products selling well in his newly renamed venture, Mulhim was seeing his cash flow increase gradually, but it still was not enough to end his now-inflated debt. His real break from his debt burden would eventually come from winning the tender for issuing Jordan’s first national identity card — two million of them.

“The contract we won as a company was our biggest to date, at $3.5 million, and it was one million dollars lower than the next bidder.”

After completing the project and receiving payment from the Jordanian government, Mulhim immediately paid up all his bank debts.

“At that moment of debt repayment, it felt like I was the richest man on earth,” he said.

Going global

Mulhim’s business continued to grow, expanding geographically and diversifying. His first big break came when the global SWIFT organization chose his company (in Dubai now) as its hub in the MENA region. A few years later, EastNets would break into the fast-growing regulatory technology industry (reg-tech) as a software solutions developer for financial institutions. He would eventually acquire a software company in the European Union and continue expanding worldwide through offices across five continents.

Mulhim’s full journey, from a small shop in Amman to a global software powerhouse, is available in his autobiography, titled “Two Brown Envelopes”. The book goes on sale at Amazon on January 25, 2022.


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