Case Studies

1. Family Gas Station (Kenya)

Challenge: Resolve cash flow while retaining customers

Solution: Decisive action and a perks program

Alnoor created his first opportunity to turn around a business at the age of 22 when his parents left Kenya for a three-month vacation—and put him in charge of the family gas station.

The young man moved quickly and decisively. First, he identified a cash flow problem: a customer credit system that left balances outstanding for as long as 90 days. Because credit was not available from his suppliers—the oil companies demanded payment up front—Alnoor immediately closed 200 customer credit accounts and sold gas only for cash.

To replace the inevitable loss of business, Alnoor identified a new group of customers he believed would offer a stable revenue stream: drivers of private public transport vans (in Kenya private individuals offer mass transportation services with their own vehicles—like a cross between a bus and a taxi service). He offered them small gifts which succeeded in securing their loyalty (which resulted in the first loyalty rewards program in Kenya). By the time Mr. and Mrs. Kassam returned from their holiday, cash flow was resolved and volume and profitability were up.

2. SmartSeed Venture Capital (Vancouver)

Challenge: Attract start-up capital

Solution: Bring institutional investors on board

When Alnoor and his business partner formed SmartSeed, a technology venture capital consultancy, they raised capital from about 20 individual high net-worth investors. Alnoor recognized that major growth in the fund would require a big stake from an institutional investor like a pension fund. This led to a chicken-and-egg conundrum: institutional investors only invest in big funds; but funds only get big through contributions by institutional investors.

Alnoor targeted the biggest pension fund in BC as their ideal investor. He reasoned that by embracing a long sales cycle, he could build a relationship with the fund and gradually earn their trust. His tactic was to behave like a big fund: he maintained constant contact with the fund managers and sent them regular reports as if they were already a major investor. After establishing a solid track record over 18 months, the pension fund agreed to a commitment of $20 million—and they introduced SmartSeed to pension funds in Ontario, Quebec and the US. The additional investments WOULD have swelled SmartSeed to a $60 million fund.

3. Hotel 5 (Calgary)

Challenge: Rehabilitate an unprofitable hotel

Solution: Rebrand and create service opportunities

Like every venture Alnoor approaches, he saw the hotel he purchased at 618 5th Ave. S.W. as an opportunity. The existing hotel was forgettable to Calgarians and visitors alike, and the service model was mired in a backwards mentality.

First, Alnoor identified the hotel's location—at the intersection of 5th Ave and 5th St SW—as one of its prime assets. With the support of a branding campaign, he changed the name from the humdrum "Hawthorne Hotel" to "Hotel 5": a moniker that announced the hotel's location and was easy to remember and pronounce—especially for the English-as-a-second-language taxi drivers who deliver customers to the front door.

Meanwhile, Alnoor identified a second heavily underperforming asset of the hotel: 330 parking spaces in the heart of the most expensive parking market in Canada. A third party firm was managing the lot at a steep discount, charging nearly half the market rate while surrounding lots had waiting lists.

Alnoor brought the management of the parking lot in-house and converted it to a unreserved valet service for $450 per month (compared to the same price for self-serve reserved parking elsewhere on the block).

Valet parking increased the lot's capacity by 15%. This, combined with the price increase, netted Hotel 5 an additional $1 million in yearly revenue.

To refresh the hotel's service model, Alnoor encouraged a customer-focused mentality which he rewarded by issuing Blackberries to staff. The Blackberries boosted moral and provided staff with instant communication—allowing problems and requests to be resolved on the spot.

Hawthorne Hotel had a punitive long distance fee structure (over $1 a minute for calls in North America) that encouraged guests to use their cell phones instead. Hotel 5 offered 5¢/minute within North America and 10¢/minute for overseas calls. Due to increased volume, the move was revenue neutral for the hotel—but the perceived value to guests was one of the many changes that increased occupancy to an average of 67% by 2006.
Alnoor sold the hotel in 2006 for $29.5 million.