Swimming Against the Stream

Blog #2

Swimming Against the Stream

By

Hazem Mulhim

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If you had told me in the early 1980s, when I launched Jordan’s first high-street computer store, that I would one day run my own global company that serves 10 per cent of the world’s banks, I wouldn’t have believed you. That kind of corporate journey is the stuff of dreams. It doesn’t happen in real life.

Except, of course, it has. Today, my company, Eastnets, focuses on countering cyberattacks, money laundering, terrorist finance and other fraudulent activities in the global financial services industry. Its evolution from computer store business to global company with offices not only in the Middle East but also in Europe, North Africa and the United States happened in a series of leaps and bounds. But the all-important giant leap took place some 25 years after I opened my computer store on a street in Jordan’s capital, Amman.?

In 2007, I was actually going through a tough time. A big deal that would have seen Eastnets (by then a regional Middle Eastern company headquartered in Dubai) merge with a bigger Italian corporation fell through and a long-term corporate partner, then under new management, was wanting to scale back its collaborative activity. For a fleeting moment, I pictured myself back running a high-street computer store, having lost everything I had built over the past few years. But, of course, there was no way that I was going to let that happen.?

To get some perspective on my predicament, I flew to Sydney in Australia where I attended an annual conference for SWIFT, the global interbank transaction system. In the past, I had always found these gatherings a good way to stand back from the day-to-day burden of running the business. They were a chance to meet old friends, connect with useful contacts, swap industry gossip, and pick up valuable business intelligence. But this time, I just couldn’t take my mind off the problems that were mounting up at home. So, during one of the coffee breaks, I sought out a quiet place and thought hard about what to do next. Then, almost instinctively, I reached for my mobile and phoned a man I barely knew.

It was the biggest gamble of my life.?

I didn’t really know the CEO of SIDE International. But I did know all about this remarkable Belgium-based technology company. In the wake of 9/11, there was growing demand for anti-money laundering protection among banks in the Middle East because new legislation, specifically the Patriot Act passed in the United States, obliged them to take extra precautions to prevent black money from being used to finance terrorist activities. As I had an extensive list of banking clients, SIDE International appointed Eastnets as the reseller of its valuable market-leading anti-money laundering software in the Middle East.?

After a few rings on his mobile, the CEO answered my call. From his abrupt tone, it was clear that he was surprised to hear from me and not particularly interested in prolonging the conversation. But this changed when I said: “I have a proposition to make to you.”?

“What is it?” he said.?

?“I would like to make an offer for SIDE”. There was a silence. I wondered if the connection had dropped. “Hello?” I said.?

He then responded: “Yes. Let’s talk.”?

The next day, we resumed the conversation, and he confirmed his interest in selling his company to me. Those words were music to my ears. But frankly, I had no idea if I could actually afford to buy SIDE International.?

As we continued the conversation, I could tell that the CEO had a number in his mind—a dollar figure that he would be prepared to accept. When he eventually divulged the figure, I knew I had to move fast and get the support of my long-term investors who were based in the Middle East. So, I cut short my planned five-day trip, flew from Sydney to Kuwait, and presented my proposal to the investors.?

I knew it was going to be a difficult pitch. How many Middle Eastern technology companies were there? Not many. How many would dare to attempt to buy a European technology company? None, to my knowledge. At least, not then. In other words, there really was no precedent for this kind of move. But over the years, I have learned that swimming against the stream is a defining feature of an entrepreneur.?

I told the investors that the acquisition represented a golden opportunity for Eastnets to become a truly global technology company. Yes, on the face of it, there was a hefty price tag. But what did that buy? It bought access to global markets through 250 corporate customers and dozens of product resellers operating all around the world. It bought a regional headquarters in Europe together with offices in New York. It bought proximity to the SWIFT’s head office in Belgium, the custodian banks in Luxembourg, and the Financial Action Task Force on money laundering in France. Above all, it bought ownership of valuable intellectual property—namely, SIDE International’s anti-money laundering software. As a reseller, I explained to the investors, Eastnets was a follower and, as such, at the mercy of other organizations. But with our own intellectual property, we could break free and chart our own course.?

I managed to convince the investors, and a few months later, after further negotiations, we completed the deal, and with a squiggle of my pen, I spent more money than I had ever spent before. A few hours after this, as I reflected on my acquisition, it dawned on me that signing on the dotted line was the easy bit. The business of merging two very different companies—one European, one Middle Eastern—was going to be a heck of a challenge. ?

But since that day, I have constantly thanked my lucky stars that I took the gamble to acquire SIDE International. Yes—by pushing for Eastnets, a Middle Eastern company, to acquire a European company, and thereby become a global company, I was swimming against the stream. But I personally—and we as a company—have never looked back.

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Eastnets’ Founder and CEO Hazem Mulhim’s new book, Two Brown Envelopes: How to Shrug Off Setbacks, Bounce Back from Failure, and Build a Global Business (Houndstooth Press, 2022), is published on 25 January 2022 and will be available on Amazon.