Impressions of Israel
Visiting Israel from Saudi Arabia was no easy feat. The two countries do not have formal diplomatic relations, and generally Israel (or Occupied Palestine as it is sometimes referred to) is a taboo subject. There are no direct flights between Saudi Arabia and Israel, and anyone with an Israeli stamp in their passport is not allowed to enter Saudi Arabia (or Syria). In fact, it is out of minor concern about client relations that I have waited to write this post. My visit to Jerusalem with four colleagues actually took place in October.
Therefore, in order to travel between the two countries, it was necessary to fly from Riyadh to Amman, Jordan, and hire a car to take us from Amman to the Border. There, we passed through a slow, if thorough, immigration process and security screening on foot to cross the border. On the other side, we hired another van to take us through the West Bank to Jerusalem.
General Impressions:
- Israel is the most developed country in the middle east. Many of the modern amenities that I would expect in Europe or the US, such as high quality organic foods, decent hotels, and a good nightlife are present in abundance
- Many cultural eccentricities are pleasant and truly unique to this country. One night we watched a crowd of traditionally dressed teenage Jewish boys dancing in a plaza to a rock-singing Yiddish-speaking Rabbi - all I could think was “this could only happen here”
- Old town Jerusalem is a fantastic and bustling maze of clothing shops, jewellers, butchers, churches, and temples
- Israeli girls are fun and beautiful; matched, perhaps only by their neighbours to the North, the Lebanese
A Feast in Old Town Jerusalem: The old city was a sea of life and commerce - streets crowded with shops and shoppers and a vibrant buzzing of activity. By the time we arrived, we were starving and sought nourishment at the first little cafe we passed, just inside the old city gates. We were not disappointed.
An old man with shaky hands and a warm smile set us down at his only two tables, and proceeded to feed us an incredibly memorable feast. It started with simple hummus and bread, then fattoush salad, then delicious chicken and peppers in a lemon and butter sauce, all served with fresh squeezed pomegranate juice. Our host was chef, waiter, and juicer, so the meal proceeded at a leisurely pace over a couple of hours, allowing us to fully take in the coming and going of hundreds of visitors to the markets.
Night Life: A visit to Ben Yehuda Street for dinner opened my eyes to the simultaneous fun and beauty of the city and its residents. We enjoyed a few cocktails at the hotel before we departed, and were already in a festive mood when we arrived on these streets crowded with young Israelis looking for a fun evening on the town. We found a good restaurant, and proceeded to finish a carafe or two of wine while hitting on our drop-dead gorgeous waitress (who, perhaps for the benefit of the tip, and perhaps due to our impaired perception skills, seemed to be enjoying this immensely).
After dinner we hit the street and enjoyed a bit of people watching as we searched for a promising bar. It seemed the average age on the street was about 23, and the number of attractive girls staggering (we were, remember, a group of five guys not used to seeing much more than a woman’s eyes in Saudi Arabia). Enter the singing rabbi I mentioned above, and it was a scene of beauty, culture, and festivity.
Bethlehem: On our second day, we made a trip back into the West Bank to see the birth place of Jesus. We arrived at the church of nativity just in time to catch the mid-morning prayer in the square outside, and got to enjoy the juxtaposition of hundreds of faithful Muslims honouring their faith immediately next to one of the holiest sites in Christianity.
Inside the church, a tour group of Spanish faithful had arranged a special ceremony and service with a Latin and Spanish speaking priest in the crypt where Jesus was born and where his manger lay. It was powerful to witness the passionate faith of the guests, and to see the markers representing these important landmarks to history and the child stories of many Christmas’ past.
Dead Sea: As we made our way back to Amman to return to Riyadh, we were forced to take a long detour to an alternate border crossing into Jordan. The delay cost us the opportunity to visit the Dead Sea during the daylight, but two of us braved the detour in our journey to the airport to spend 45 minutes floating in the intensely saline waters of the Dead Sea, the lowest point on earth’s rocky surface. The eery feeling of weightlessness in the water was a strange but exciting experience that epitomized the weekend. My visit to Israel would turn out to be my favourite part of my adventures in the Middle East.
ING Direct Enters Low Cost Investing
With an email announcement sent to ING Direct customers last night, the integration of ING Direct and ShareBuilder is official:
I’m pleased to announce that ShareBuilder, America’s most innovative online brokerage, is now part of ING DIRECT.
… ShareBuilder was created by its pioneering founders to make it simple and affordable for regular folks to invest in the stock market. Thanks to ShareBuilder, investors big and small can now invest, big time.
The deal, which was first announced in November, introduces an interesting new element into the world of low cost brokerages.
Earlier this year, BusinessWeek covered several new players in the world of low cost equity investment, including the likes of TradeKing, Zecco, and ThinkorSwim, who use a powerful combination of social networking and low cost trading to target first time investors. First time investors value the social element because it helps them make sense of the world of investing through easy to follow blogs, forums, and FAQs. Users answer one another’s questions, reducing the need to hire an army of support staff to help them.
Yet first time investors are also the target audience for ShareBuilder, which earned rave reviews in Forbes “Best of the Web” for its investor starter packages that included an investment guide, investment certificate, and a copy of the Wall Street Journal Guide to Understanding Personal Finance; distinctly “old-school” approaches to targeting this same audience. Its online guides to investing in ETFs are similarly praised by Forbes, and 40% of their users invest in them.
So the question comes to my mind: why did ING pick ShareBuilder? From the little I know of the company, here is some common-sense speculation:
- Acquire a well-established (ShareBuilder has been around since 1996) with a good reputation and track record
- Acquire new customers for ShareBuilder, and use the existing base of ING Direct users to add new users to ShareBuilder
- Acquire a company with a similar target customer to ING Direct: the financially inexperienced
- Extend ING Direct’s product offering of simple investment offerings to include equity investments and ETFs
How can we analyze those criteria to understand the prospects for these new social investment sites to be acquired? The first two bullets don’t currently play well, as both are still young and have relatively small pools of users, but that could change with time. The third and fourth fit quite well, assuming there are some other big fish like ING Direct looking to get into the world of equity investments.
But it is the choice of ShareBuilder and its technology approach which has me thinking this morning. It seems to be part of the “old guard” of web investment (forgive the expression: web investing 1.0), lacking any significant social elements that the new players are using as their main differentiator. But which is the better approach to addressing the needs of new investors? Easy to use, self-service FAQs and free investment books, or forums and user-generated content?
Since obviously the answer to that will depend on the particular user, and their need and desire to interaction and personal advice, I suppose the question really becomes: how big is the pool of new investors who prefer “traditional” help tools, as compared to “social” tools? Are there enough new users comfortable with social networking to slowly erode share from eTrade, ShareBuilder, and the like?
An emerging generation of young professionals who spent their college careers on social networking sites would seem to bode well for Zecco and TradeKing, but it would be interesting to see an analysis: for every 100 new investors joining a brokerage online today, how many go to each? And what can the new players do to increase those figures to their advantage?
Opportunity to Build a Worldwide Brand of Boutique Hotels
Tourists visiting new cities are certainly not all looking for the same thing out of their experience. Some seek inexpensive or unique shopping experiences, some seek thrills and adventure, others seek the opportunity to say “I went, I saw, I … took a picture.” What generally unites people when they are traveling, particularly in parts of the world that are new and unfamiliar to them, is the desire to sample and taste a bit of the culture that makes their destination unique.
For tourists, selecting a hotel is a challenge of balancing their desires. In most cases, they want:
- A hotel they can afford
- A hotel where they feel they will receive the level of service they are accustomed to
- A hotel that is comfortable, safe, and clean
- A hotel that is conveniently located to the places they want to visit
Trying to satisfy these four challenges is difficult enough, and in many cases lead people to choose the Marriott, Hilton, or Sheraton, even as they aspire to “immerse themselves” in their experience. They settle for these international chains because they are reliably consistent, delivering fundamentally the same hotel experience wherever you go. Yet that, inherently, is their fundamental flaw - they fail to meet the truly differentiating fifth and sixth criteria for a truly remarkable hotel experience:
- A hotel that reflects the culture and local flavour of the surrounding city
- A hotel that is exciting and unique; an adventure unto itself
I have little doubt that in nearly every corner of the world there are wonderful local hotels that meet all six of these criteria (though, sadly, not all - Jizan, Saudi Arabia comes to mind). The challenge for the tourist is how to FIND these hotels. For the more adventurous, sites like TripAdvisor can help. Where you are lucky enough to have a local friend to serve as your guide, you might be directed as to the best place to stay.
But, at the end of the day, CatLover245’s rave reviews and assurances of good customer service really aren’t enough for most people to choose the Little Damascus Inn over the Sheraton. At least you can be reasonably confident that you won’t find bed bugs at the Sheraton.
The challenge of building confidence with consumers that a hotel can, in fact, meet all of these criteria creates a significant opportunity to build a network of branded boutique hotels in major tourist destinations throughout the world.
An entrepreneur with good financial backing could make a small number of hotel investments in high-growth tourism cities such as the Middle East and Northern Africa, bring them up to international standards of quality and service, unite them under a brand, and market them to tourists from abroad. With time, as CatLover245 and her friends write positive reviews, and as more and more customers experience the benefits of the hotel in its diverse locations, it will build a faithful following of advocates and frequent stayers.
I would choose to first target the developing world, where many hotels miss out on substantial opportunity to attract visitors merely by lack of a web presence with photos and a map, written in fluent English. With an understanding of the increase in revenue that could be expected by linking a hotel into online reservation systems like Orbitz and Hotels.com, investors could value properties higher than their current owners.
By upgrading service, renovating and redecorating rooms, and bringing in an additional infusion of local flavours and colours, the hotels could start charging more for rooms. Substantial changes to management and workforce wouldn’t be necessary so much as bringing a few leaders who can help oversee the transition to world-class standards.
How long this opportunity will remain untapped is questionable. Already, chains like Joie de Vivre and Kimpton are building branded networks of boutique hotels throughout California and the United States. Companies like Mexico Boutique Hotels are taking that concept to other popular mainstream tourist destinations. It’s only a matter of time before the same basic concept is carried to other parts of the world.
Further reading on Boutique Hotels:
- Brand Channel: “Hotel Brands Break the Chain”
- The Independent: “The Complete Guide to European Boutique Hotels”
- Boutique Hotels Magazine
PayPal Should Go Social
PayPal, the electronic payment program launched to prominence by eBay, should join the social networking bandwagon and create social applications for LinkedIn and Facebook. While other stalwarts of “Web 1.0,” such as eBay and Skype, have launched into this space, PayPal has inexplicably lagged behind.
My friend Tony and I were discussing this idea yesterday as we tried to finally sort out payment from a recent trip we took together to Spain. We had a few ideas about how a social application could add real value for the company:
- Build Awareness: PayPal already has good penetration and is clearly the market leader in the US for electronic money transfer. It is not, however, universally understood or used. Trying to arrange payments for a company ski trip recently I discovered that more than half of my colleagues had never used the program. Facebook badges and notifications about friends adding the new application would surely help further build brand awareness for their service, and attract more users.
- Find Fellow Users More Easily: Similar to Skype’s Facebook application, PayPal could help users of the application to more easily identify which of their friends also use PayPal to make it easier to determine the easiest way to send payments to them
But with an ounce of innovation, combined with a new social platform, PayPal could start to offer some truly interesting services.
- Collaborative Accounts: Allow multiple users to create a common account linked to each of their individual accounts for making payments and managing cashflows relevant to all of them. This would have been perfect for organizing the company ski trip, as it would have both allowed users to easily add money into the account, it would allow a small group of “Administrators” to make payments out of it and to the various vendors that needed payment (lodging, lift tickets, shuttle services, etc). Everyone would be able to see how much money is in the account, and how it’s being spent. Its transparency and paper trail would largely eliminate the need for a single person to be the “Treasurer.”
- Pay Backs: So you and your friends went camping this weekend. Two bought $40 worth of groceries each, one bought $200 in alcohol, and your other three friends, well, they ate and drank. How are you going to work out repayment? A newly social PayPal could help friends solve this dilemma, allowing multiple users to add money to a common account (called, perhaps, “BoozeCamp”) which would then be repaid evenly to all members. A little creativity on how to allow people to add non-cash value (receipts) to represent their contributions, and you’d be set
- Communal Payments: You have three roommates, and a landlord who insists on receiving only one check each month for rent. Or perhaps, you and your friends want to chip in to help out your friend who hosted a great party, or who paid for a birthday present from “everyone.” Basically just a slight modification on the above ideas, PayPal could create an easy system for making payments together, by aggregating funds from multiple users, and allowing everyone to see who has paid, and who hasn’t
Any of these innovations could add new uses to the stagnating PayPal platform (who, by the way, could still use a user-interface makeover while they are at it - even after they prettied-up their front page), and help combat new entrants. There could be some tough legal issues to overcome regarding money laundering, but I imagine there could be some balance struck between putting maximum fund-limit caps on accounts while still allowing 90% of legal uses.
Trading “Green” - The Global Carbon Index
I ran across an interesting press release from Barclays Capital today about their recent launch of the Barclays Capital Global Carbon Index (BGCI). It was also covered in various News Outlets:
This is the first time that such an index has been made available to asset managers, private banks and institutional investors, according to Barcap. The Barclays Capital global carbon index (BGCI), intended as a benchmark for the rapidly growing carbon emissions markets, is made up of two sub-indices that track the performance of EUA credits in the EU emissions trading scheme (EU ETS) and Certified Emission Reduction (CER) credits generated by the clean development mechanism (CDM) [part of the Kyoto Treaty].While my understanding of the financial markets is limited, this is an interesting innovation in that it will allow investors to buy into the growing market for “greenness” - the offsets and certified environmental upgrades of businesses. It would seem that, certainly over the long term at least, truly environmentally-friendly business opportunities and technological advancements will continue to become scarcer and more difficult to achieve. For polluters needing to trade their carbon emissions with more “green” counterparts under increasingly popular carbon trading schemes (the US is set to follow in the EU’s footsteps here), selling “black” and buying “green” will only become more expensive with time. A commodity with growing demand and increasing scarcity? Sounds like a good investment to me.
Impressions of Tabuk
Tabuk (also “Tabouk”) is a province in the northwest of Saudi Arabia, separated by many hundreds of kilometers of desert and mountains from the largest cities in the kingdom, but bordering Jordan and the coastal city of Acaba. Tabuk City is closer to Damascus than it is to Jeddah.
Tabuk province enjoys the longest coastline in the KSA, along the Red Sea.
I arrived here on a business trip, and unfortunately much of my time was spent in business meetings and at a mediocre, but passable hotel. During the various meetings, and through two tours of city facilitated by our hosts, I was able to develop a reasonable picture of the place.
Based upon the research conducted prior to the trip, I expected to find something more closely resembling Egypt than Saudi Arabia. Its GDP per capita and education rates are significantly below the national average, for instance.
Instead, we encountered in the city of Tabuk the first real “oasis” I would visit in Saudi Arabia. The best analogy is to compare Tabuk to the Midwest of the United States. It is an agricultural area, with a pleasant climate, and a population that enjoys a quieter pace of life. Generally, the quality of life that we witnessed was good, and the people warm, hospitable, and occasionally, quite entrepreneurial.
Plants Rising from the Desert
One of the most shocking impressions that the region left upon me was how agriculture has been successful despite the negligible annual rainfall and sweeping desert sands. As we drove along the highway to visit a large commercial farm, watching the flat sands pass us by on either side of the car, we suddenly came upon life. Tall stalks, like corn (though probably not corn… it’s too water intensive), rose from the desert sand in a tight circle around the rotating irrigation equipment that gave it life.
As we explored the farm, we learned how high water intensity crops like wheat are being substituted for more resilient ones, like olives, and higher value crops, like fruits and vegetables. The water for the crops is drawn from a large aquifer which lies below the valley where Tabuk city is located. How sustainable this is in the long run, is a question to which few appear to have an answer.
Untouched Coastline
While meeting with different business and ministry leaders, we heard them describe the virgin coastline on the Red Sea as a paradise of sand, water, and endless potential. In many ways, they were right. The trick, however, is that a “virgin coastline” might in fact be covered in SUV tracks, littered with garbage and debris ranging from bottles and wrappers to car tires, and in many places completely without trees or other plant life. Nevertheless, sand and water are plentiful, and as far as I can tell, so is business opportunity.
Breathtaking Mountains and Desert
What actually impressed me most about Tabuk and its potential as a future tourist destination was not its coastline, but the desert and mountains which separate the city of Tabuk from the beaches an hour and a half to the west. What starts out looking like the deserts and mountains of Western Colorado and Eastern Utah turns into a terrain altogether unfamiliar. The area’s craggy peaks and jagged rock formations reminded me more of what I expect Tierra del Fuego looks like than anything I expected to find in Saudi Arabia.
Unfortunately, our short visit didn’t afford the opportunity to explore further. We read and heard about archeological sites ranging from castles to old temples similar to those found at Petra in Jordan to the North. Who knows - perhaps I will return one day.