Thursday, April 19, 2012

What Made Me Start This Blog -- A First Brainstorming of Business Ideas

As a European living in Ramallah, Palestine since a couple of months, I come across things that I am missing on the local markets, or products that Palestine is could be producing for other markets, such as Israel or elsewhere in the world...

As a foreigner, I can hardly implement these business ideas myself (also due to the fact that Israel will not grant me residency for pursuing business in Palestine), so I invite any Palestinian entrepreneur to copy, utilize and adapt these ideas, to write business plans, and seek for investors, and you are welcome to comment and get back to me for questions and consultations any time.

This is a first brainstorming of business ideas that crossed my way:

A. Profiting from Israel

The cost of the occupation inflicted on the Palestinian economy is estimated at 6.9 billion $, that´s more than half the total size of the Palestinian economy.
The occupation is doubtless bad, in many cases illegal according to international law and human rights, but hey, it is no excuse to remain lazy. While Israeli investors are largely profiting from using Palestinian land, water, and other resources, we can look for ways to profit from the Israeli economy, and take some money back to Palestine. What helps in this is
  1. The vast availability of cheap and skilled labour in Palestine
  2. About 7% of Israels citizen are illegal settlers, for whom the State of Israel wants to have easy transfer between Israel and Westbank. Therefore we can expect the borders to remain easy to cross, at least for Israeli citizen, of which 20% are Palestinians.
  3. The low (direct) taxation in Palestine, and some limited sovereignity on indirect taxation (mostly limited through Paris Protocol), and in general a less regulated market causing less friction for business, especially in the services sector.
The following are some examples how to exploit this potential:
  • Tailor-Made Suits for Israeli Market.
    Following the business model of Dolzer  http://www.dolzer.com/ who takes measurements of their clients in Germany, and lets them choose the fabric, and then sends that information to low-income countries such as India or Eastern Europe, where a suit is half-tailored, and sent to Germany, where the client will try it on and small corrections are marked, the suit goes back to India, will be finalized there, and sent back to Germany. Now take the same business model, but instead place your shop into Tel Aviv, and have the suit tailored in Nablus, saving plenty of time and transportation cost.
  • Dry-Cleaning and Ironing
    In a similar manner as described above, a large discount dry-cleaner in Tel Aviv or Jerusalem could have the labor-intensive ironing be done in the Westbank, saving a large part of the cost. This will probably work only if you have large amounts of shirts every day, making a daily courier drive profitable.
  • Maintenance for Israeli CarsThe price difference between car workshops in Israel and those in the west bank is huge. The Israeli government knows that, and protects its domestic service industry by such a law:  http://www.ynetnews.com/articles/0,7340,L-3525971,00.html
    Anyhow, I am sure there are many ways to circumvent this law. Get a lawyer to check the options... just a few ideas, the car workshop could be placed in Al-Ram, which belongs to Jerusalem, but is on the Ramallah side of the Wall. Or the workshop could be placed in a settlement, or elsewhere in a C-Area, employing Palestinian labor. Or somebody with Jerusalem ID could take the car to the Workshop, or maybe there is another loophole...
  • Advertising Palestinian Gas Stations in Hebrew and English for Israelis and Tourists
    On the way on Route 60 for example, on the southern-western end of Bethlehem, there is a gas station, not a minute from the main road, where any Israeli passing by could fill his tank for a price approximately 15% less than at an Israeli gas station. You could place an add in Hebrew or English: "Welcome to Palestine. Fill your tank at Palestinian prices. Turn left, after 100m..".. A side-effect is that these customers will be helping to solve the PA's budget issues by paying Palestinian fuel taxes.
  • Casino
    There has been a Casino in Jericho that was quite popular, especially among Israeli visitors whom religion forbids gambling, so does the state of Israel. It has been closed for a while. Why does nobody else try to open one?
  • Sell Cheap Cigarettes to Israelis and Tourists
    Cigarette tax seems to be lower in Palestine, saving approximately 5 shekel per pack. Now you could place shops somewhere easily accessible for Israelis (B-Area, somewhere close to Route 60, next to Hizme checkpoint, and next to Maale Adumim), and place large ads in Hebrew or English.

B. "Made in Palestine" branding

There is a great solidarity for the Palestinian cause around the world. Many of the supporters can do little to really help Palestine, because the key decisions on the fate of Palestinians are taken in Knesset. International political support (US, UN, etc.) might push Knesset to certain extent to find a fair solution that will grant Palestinians proper citizenship and equal rights, but these efforts didn't achieve much in the past 45 years, and it seems to be out of reach of common people. That's bad, and a common person can't change much about it. Still, we can see the solidarity for Palestine from a business perspective on the local market, as well as on export markets. Very few products you find in the world are labelled as originating from Palestine. By buying products branded as Made in Palestine, it serves as a display of solidarity for customers, who can, in spite of political frustration, at least support the Palestinian economy.
There are a few shops existing, e.g. http://www.palestine-shop.net/

Palestinian Cigarette Brand
There is an existing Palestinan cigarette manufacturer in Jerusalem (http://jerucig.com/products/index.html), and several smaller outlets in Jenin. The cigarettes are however positioned in the local low-price segment. Cigarettes with a good branding of "Made in Palestine" could have success on the large domestic market, as well as leftwingers-Israeli market, and export market to Europe for the audience attached to Palestinian solidarity. You need some catchy symbol or picture, such as Handala or such, and maybe a Kafieh pattern on the box, as well as a sales partner with well established distribution channels in Europe. Cigarettes with no chemicals seem to be en vogue among the young and well informed generation, so it may be wise to jump on that train especially for European customers.


C. IT and Telecommunications

With thousands of university graduates in IT and other technical fields every year, many of them remaining unemployed or over-skilled for their job, many experts agree that the IT industry of Palestine is bound to pick up pace -- also thanks to data being more likely to travel across borders unhindered than physical goods are under Israeli occupation or siege in Gaza. But what is there beyond some IT hardware and mobile phone retailers, two large telcos and a bunch of internet providers? Is there real innovation taking place? Here are some ideas...
  • Creating a Community Based Meshing Data-Network
    Israel doesn't grant Palestine frequencies for 3G internet. This creates a market situation where a community based WLAN-meshing network could be successful, and save a lot of cost.  Get some technological inspiration here: http://villagetelco.org/
    It could work even without additional hardware. Modern phones like Samsung Galaxy S2 have a WLAN-access point built in, so all they need is a tweaked version of the Linux firmware that allows meshing to forward data between other 802.11n peers. A random number of phone providers could pop up, offering voice/asterisk and internet uplink services within the mesh.
    Asterisk could also bridge the expensive transition between Israeli and Palestinian phone networks, so you could cheaply call your cousin in Haifa who is using an Israeli provider.
  • Digital Travel Guide
    The street maps of Palestine are horrible, and neither on Google places nor elsewhere online you find hotels, restaurants, and tourist sites. Openstreetmaps currently seems to have the best data, which could form the basis for an Android app with user-generated content. Update: aparently, I wasn't the first to come up with this idea. Check  http://www.marhabapalestine.com/ -- they didn't go live so far though.
  • GPS RoutingAlong the lines of the previous point, there is no proper maps for GPS routing. Israel is well-mapped, including the settlement routes in C-Areas of the West Bank. However, for Palestine, you need a routing where you need to determine the type of car you have (yellow or white numberplate), otherwise you will end up on the wrong road. Also the traffic situation around bottlenecks like Qalandia Checkpoint could be transmitted online -- optimizing the routing algorithm. Update: Found a company that seems to be offering related fleet management services. However, no end-user product seems available at the time being.
  • Delivery service mobile app
    A significant obstacle to successful delivery of mail, of pizza, etc. is that you have to describe in a complicated manner where your house is located. A mobile app with your GPS-enabled phone could enable hassle-free online orders, and possibly improved mail delivery/address system.
    Update: The company click and pick somehow comes close to that...

Looking forward to your comments and suggestions!

2 comments:

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