Entrepreneurs' News: Interview with Moe AlKhafaji

Moe Alkhafaji, the founder and CEO of Pure Platform, is an Iraqi American who left Iraq in 1995, and arrived at the United States in 1997. He earned BS and MS in computer science, with a Ph.D. degree in computer science in progress. His main research is around using high performance computing and machine learning to improve computational bioinformatics problems in the field of genetics. While teaching for over 7 years at 3 different universities in Chicago, Moe focused on starting companies and innovating unique solutions to compete artworld’s scale. He co-founded over 7 companies in under ten years. In the past few years, Moe's focus has revolved around the fields of Artificial Intelligence, Cyber Security, Big Data, Blockchain and Enterprise Applications. 1- As a start, can you please brief us about “Pure Platform”, what is special about this application and what makes it unique? Where did you come up with this business idea? Pure Platform delivers the world’s first trust-less (does not require trust), friction-less (does not apply any fees), and B2B2C platform, which aims at solving the biggest fintech and e-commerce problem; electronic payments. Pure Platform was officially launched in Baghdad in June of this year, with ambitious plans to spread to other provinces in Q1 of 2020, then Gulf countries within the next 12-18 months. In cash-based economies; the majority of economies in the world, customers do not use electronic forms of payment as readily as their counterparts in Western Europe and USA. Lack of trust in financial institutions as well as the subtractive financial value of existing forms of payments (debit cards, mobile payments, prepaid phone cards) are the leading factors that stand in the way of a wider adoption. Pure Platform manages both factors by providing a platform that is 100% free of transaction and subscription fees and does not require customers or businesses to trust it in order to reap its benefits. With three US-based patents, Pure Platforms stands alone as the most innovative and rewarding platform in the world with an average of 12% return for customers per transaction. Standing alone or bundled with any other form of electronic payment, it will hide the cost of fees and incentivize customers by increasing their purchasing power. Pure Platform uses the concept of reward points with unique properties that differentiate its ecosystem from any other reward point system in the world. A point in the Pure Platform ecosystem is called Kidu. Kidus are not a form of currency and do not enable speculative buying. Due to this innovative ecosystem powered by cutting edge technology, Pure Platform is THE only and leading solution to e-commerce in cash-based economies. The idea of Pure Platform came about a year and a half ago after I examined international financial reports for some of the biggest e-commerce players in the USA such as Amazon. It is very clear that the solution that Pure Platform delivers, removes the main obstacles for these players, and enables them to turn their international business to a profitable one by converting COD (cash on delivery) to a familiar and very profitable model based on prepayment, which is the dominant form of e-commerce in Western Europe and USA. 2- What were you doing before this, and is this your first business? How did you financed it? I have been working in the technology field for about 20 years, delivering innovative enterprise applications predominately in healthcare and fintech. Since my first true startup company back in 2008, I have been involved with small and mid-size companies only, primarily as a co-founder or executive. I have co-founded around 7 startups in the span of 10 years. Carrying an accumulated big bag of success and failure stories from all of these adventures, I decided to invest my time and money to start Pure Platform and have been financing it throughout. 3- Do you own a business with family members? What do you think are the benefits and challenges to running a family owned business? or do you have a partner when you started your business? How did you select a partner and how do you advice entrepreneurs to select their partners? I have not started any business with any family members. This was not an intentional decision but rather how things worked out. I don’t see any problem working with family because partners should never rely on emotions to run their business anyways. I’ve always advised my mentees that the first thing they should do is sit down with their partners and establish engagement, operating, and even potential separation bylaws. Once they agree on the specifics and fine details, they can lock the agreement away and enjoy their times together. If for whatever reason there was a misunderstanding or a problem, they can always refer back to the agreement. Partners may not hold bad intentions for each other, but they may forget or misunderstand initial verbal agreements. That’s why documentation is monumental. One of the biggest obstacles, if not the biggest, in starting and operating a startup company is the interaction amongst the partners. If you don’t choose the right partner, your startup adventure could fall short. That’s why you should never choose emotionally, and don’t force-fit someone into a role because she is a part of a friends’ circle. Focus on selecting partners that believe in the idea fully, and are willing to commit to it beyond 9-5, five days a week. Lastly, your partners should complete and supplement you. You shouldn’t choose your partners just because they agree with you on everything. Disagreements are a normal part of the business, as long as the discussions are constructive and objective. 4- Who are your main competitors? How do you compete against them? Pure Platform does not have any direct competitors in the entire region (not just Iraq). Indirect competition can come from companies offering reward points and trying to establish a loyalty network. Pure Platform aims to stand out using its cutting edge and innovative technology that gives us competitive advantage such as offline transactions for customers, friction-less transactions which magnify returns per transaction for customers, rich features such as Kidu transfers, big confidentiality and privacy focus, highly available app with zero downtime since launch, unique platform with patented conversational advertisement capabilities, patented universal shopping cart implementation with one click access to some of the biggest vendors such as Amazon, Sephora, Nike, etc. We focus on technology and that is our strongest ally and competitive edge. With a highly skilled team spawning Iraq and USA, we deliver new features in a 3-week agile iteration. We are very advanced and better funded for small and mid-size competition, and highly lean and too versatile for big competition to catch up with us. The biggest indirect competition in e-commerce can actually partner with us to benefit from our innovation by offering their services and products powered by our solution to deliver even more financial incentives to their own existing customer base. 5- Did you operate your business from your home? What were the challenges and benefits to this strategy? Most of our technology staff work from their homes in Baghdad, Chicago, Detroit and Houston. Once we established a solid process for collaboration, and hierarchical and horizontal communication, the team plugged in quickly and we were able to turn our geographic disparity into strength. We use Github for code storage, code review, and deployment request management. We use Slack for instant communication between team members. We also rely on WhatsApp, Skype, and GoToMeeting for live interaction or scrum meetings. I believe the geographic location of your team does not matter as long as a process is fully established, and team evaluation is based purely on performance rather than clocking-in and clocking-out. 6- Did you write a business plan? Was it an effective tool for you? We have created a 3 year business plan to guide our tactical as well as strategic goals. Business plans change constantly and not meant to be perfect nor set in stone, however, they remain to remind you of which direction you need to be going, and what ROI you expect to receive. If you fall too far apart from your goals, maybe it is time for a pivot, and a new business plan. Pivots should be part of life and driven by constant learning. Don’t be afraid of or too stubborn to pivot. 7- How was your experience in running the business, was it different from what you expected? Pure Platform was my first startup outside of the USA. In Baghdad, from all places. It wasn’t easy to find the right people who see eye to eye with my ambitions for the business. Pure Platform aims to change most world economies, starting in Iraq. This ambitious goal requires people with vision, perseverance, persistence, and dedication. The other challenge was to gain the trust of customers and businesses. Iraqis have been robbed by so many businesses, empowered by weak or non-existent regulations. It took some effort to get our point across that we are the last of all beneficiaries (businesses win first by selling to customers, then customers benefit by earning Kidus on their purchases, then and only then we benefit), and that Pure Platform is trust-less, which means trust is not required to reap the benefits of our platform. Definitely internet challenges especially in the last two months have been painful, but not as painful as for other companies because our platform was designed to allow offline transactions for customers!! Our customers were transacting using our app even when 3G was out! Operating the business remains a challenge, but no less or more challenging than any of my other startups in the USA, including the ones that I exited successfully! I believe that true entrepreneurs are ones that always find a legal but clever way around any challenge. 8- What have you done that has been very effective in helping to grow the business and how is the market responding to your offering? Although we haven’t spent a penny on advertisement outside of social media, I am happy to report that we are roughly 6 months ahead of plans. We believe that our platform is beneficiary and additive for the average Iraqi customer, and business. All we need to do is deliver our message to our target audience and they will flood the registration system. Our social media team is very successful at engaging our customers. Part of the reason for our social media success is that we run our pages ethically and with integrity. We never delete any negative comments unless they include profanity, and often explain to the sender why we hid their comment. We don’t pay for crawlers to add artificial likes to our pages and inflate our success appearance. We heavily rely on organic growth of customers who come voluntarily and because they like our service. We do not use click-bait approaches. We respond to our customers very quickly throughout the clock with 24/7 coverage. If one customer has bad experience, the entire department is on alert to work hard to reverse that customer’s opinion through engaging him or her and offer a satisfactory solution. We noticed by adopting such an approach, and having a great story to tell, our customers are loving our service and you can see their encouraging and positive comments throughout our social media pages. Starting from Q1 of 2020, we will focus primarily on big strategic agreements and faster and wider adoption of our platform. This will allow us to reach more customers, at the same time diversify the domain of offerings through the platform. We are also in the process of establishing strategic partnerships with the economic section of the US embassy in Baghdad, as well as big companies in the USA such as Amazon and Walmart. 9- Is there anything you wish you had done differently? Obviously, in every startup, you have to test the limits. You should never stay in your comfort zone. If you don’t fail, you are not trying hard enough. This means by default if I am to do this all over again, I’d definitely do things differently to arrive at where we are today faster (although it only took us 4 months to get here). If anyone’s answer to this question is no, that means they haven’t risked and challenged themselves and their business hypotheses hard enough to make mistakes along the way to learn from. 10- Finding employees to work in a new and growing business can be a challenge. How did you find your employees? Temporary labor can be a great asset to an entrepreneur. Have you ever hired temps or contractors? We rely on long term employment in our technology team. That’s because we see them as an asset and an important piece in our future plans. We are training and constantly evolving our developers’ technical skills and thus they are very invaluable for us. We also rely on temporary and consultant type positions for tactical projects. It has been very difficult to find good quality technology developers, so we picked some of the smartest technologists and gave them additional training, with supervision from very experienced USA-based software and enterprise application architects. It is generally hard to find staff in Baghdad in other domains such as office and administrative related roles. I was shocked to see that we always receive hundreds of CVs within two days but only a handful show up to interviews. People seem to be more trigger happy with applying for jobs and less so with committing to one. It took some time to get used to this culture which is different than what I’m used to in the USA. Our employees are our biggest asset, and we treat each other equally with respect. Happy employees definitely translate to happy customers. I’ve also noticed lack of understanding of what really should matter at a workplace. People, generally, focus primarily on money rather than building something big or cool, working in an exceptional work environment, having upside learning potential, etc. While our salaries are very competitive, we also provide a unique work environment based on treating our employees with full trust. Our employees had been enjoying unlimited vacation, and flexible work environment. As of today, there had been zero requests that were denied for time off or shifting working schedule. 11- With the current economy in a slump, what cost saving tips would you have for a new entrepreneur? Whether the economy is in a slump or not, cost saving should be a constant exercise for entrepreneurs. The strength of new startups lies in their nimbleness and their lean approaches. As long as small businesses can churn out new innovative ideas quickly and cost effectively, they can compete with the biggest players in the market. We have seen it in the USA where time and time again, smaller businesses not only keep up and beat bigger competition, but put them out of business quite often. However, one of the things I noticed about entrepreneurs in Iraq is their tendency to spend on marketing right away. I heard one entrepreneur starting a company that his plan for domination was to build something already exists but spend more on marketing it! To me, it is not marketing that makes your company. It is your products or services. So, create useful solutions and iterate several times on them until they become beneficial to the consumer and then market them. Another thing I noticed is the love to mimic what others have done. It is one thing to not recreate the wheel, and another to copycat what someone else has done, without fully studying their market, their approach, and the feedback created in the market towards their products and services. I often hear entrepreneurs talk about how this business is making a lot of money or that business is so successful simply because they had a “hunch” or because they saw their ads somewhere. Not every business is a successful one, no matter how big or small. So, don’t “chase” and copycat others. Create your own path, and it is ok to learn a thing or two from others’ failures but don’t walk the exact path. Running in someone’s footsteps will never allow you to pass them in a race. Your spend should also revolve around your strong competitive advantage and not the auxiliary things. For us, it is our technology, where we pay dearly. I would highly suggest experimenting with things in smaller trials before spending a lot more and doing them in a bigger scale. And always do postmortem meetings to discuss what went right or wrong to learn for future attempts. Lastly, never start a campaign without specifying what the desired outcome should be. Often times once you do the planning you realize the desired outcome won’t be worth the spend. 12- What advice would you give to somebody else who wanted to start a similar business? I’d definitely tell the person to do their due diligence on the market where relevant to their idea. It’s never good enough to say I’m the first in the world without actually doing significant research to identify direct and indirect competitions, as well as understand the feasibility of the idea. As great as the idea may seem, the customer may not be ready for it, or it may not be as good in the near future. Analyzing the market need should also include trends and forecasting trajectory of such solutions to see if they will and continue to be valid solutions. Secondly, I’d definitely advise the person to find the right partners to join him or her. And that all members of the founding team must be highly persistent and stubborn in their desire to make the business succeed. I’d tell them that failures are stepping stones on the path to success. And with every new challenge, he or she should be glad that the path is not easy. I always say, “if it were easy, someone would have done it”. Thirdly, I’d tell them that they shouldn’t think raising money should be the first step. I’ve always thought that raising money is necessary to scale a proven concept, and should not be used to prove the idea or its feasibility. Never give up. This is your baby, and no one gives up on their baby no matter how painful raising a child may be. 13- For women entrepreneurs, what specific advice would you have for young women who would like to become an entrepreneur? Are there specific advantages, disadvantages to be a women business owner? In my experience, some women could surpass most men in many fields. So, it is not a gender thing. It is one’s desire to excel. As long as the woman strives to succeed and has the will to get ahead, her gender won’t be an obstacle. I’ve met many women in my professional career who although I hired some on my team, I learned new things from. Even in software engineering where men are dominant (by numbers), I’ve trained young iraqi women and they were equivalent to their men counterparts in terms of their critical thinking. I’ve met women entrepreneurs in Iraq and was inspired by their focus and strong will to rise against big waves to make something happen. I don’t know by advising if I’ll add anything to a woman’s strong desire to succeed, but I’d definitely say: dream it first, then go for it. In terms of advantages and disadvantages, I haven’t really come across an area where there was a role that only a woman or a man could fulfill. If anything, there may be unique advantages to being a woman entrepreneur in solving women specific problems in any market. A man entrepreneur may find difficulties disrupting the makeup market for example because women have lived all the challenges of acquiring or using makeup firsthand, and if entrepreneur in core, a woman can disrupt the market better by providing a better solution. I’m a big advocate of diversification in any company. I think it is healthy, and brings similar diversification in ideas and outputs that could reflect positively on the business. 14- What outside resources did you use to help get things up and running? Starting then growing a business is about managing risks. When you start a new business, you should have identified several risk factors that stand between you and market dominance. Operating the business is then about eliminating or managing those risks one by one, and any new ones that may appear during your journey. To eliminate as many risk factors as possible, one step was applying for patents and hiring a great IP law firm to understand the competitive landscape when it comes to similar IP to what we are accomplishing at Pure Platform. To perfect the Kidu ecosystem, consulting with an Economics professor who was a Nobel-prize nominee at the University of Chicago to brainstorm the various properties of currency vs digital currency vs points (Kidu), and how supply-demand will drive up the price and benefit without speculation, and avoiding a bubble-enabled approach to inflating Kidu price. Consulting with banks and the Treasury Department in the USA to confirm that Kidus won’t fall within the category of currency or securities to avoid having to apply for a banking or similar license. Consulting with the CBI and other banks in Iraq to confirm the same. Testing out local shops in Baghdad in low-income vs high-income areas to understand first-hand market needs and willingness to evolve current processes. Speaking to many small and mid size business owners also helped tremendously in shaping up what Pure Platform came out to be. Networking and being out on the field was and continues to be monumental in evolving and pivoting the business throughout to ensure focused approach in addressing real problems in the real world. 15- What's next for you? Making Pure Platform a known brand and synonymous with increased purchasing power for the consumer. Making it widely understood that we also help the business sell their products and services at the cheapest price without lowering their profits or increasing their costs. Ultimately, I strive to make Pure Platform the platform that is used in the Gulf region to convert cash into digital money which sparks tremendous growth in e-commerce and would consequently bring hundreds of millions to billions of dollars back to local communities without compromising on quality or cost. My ultimate goal is to make Pure Platform the most efficient and adopted backbone platform to e-commerce in the region within the next 2-3 years.