Firdouz Hameed
Craig Fernandes’ Lock & Stock has changed how students around the world think about their mobile phones during class and has helped better our education system along the way. The app built by Craig and his team not only plays a pivotal role in helping teenagers and young adults fight digital addiction, but also helps fight basic universal student problems such as limited job prospects, lower spending power, and rising tuition costs. Lock&Stock is recognized as one of the fastest-growing youth-focused startups in the Middle East region. For his contribution to the education sector, Craig was named as a Future Star at the Arabian Business awards in 2019. He has also been featured in every national newspaper in the UAE, as well as in reputed publications like TechRadar and Entrepreneur Magazine. Now it’s our turn to shine some light on the man.
Can you please tell us a bit about your upbringing, family, education, and what led to the start of your company?
I suppose you can say that I come from a very average, middle-class background. I was born in Dubai in 1996, as part of the first generation of expatriates that were born and raised in the Gulf after the immigration boom of the late 80s and early 90s. Both my parents worked 8-5 salary jobs, and every day I witnessed how tough it was to put food on the table, clothes on my back, and books in my bag. I’d be nowhere without them. We lived in an apartment in Sharjah, which is a suburb of Dubai, in an old, run-down building that cost us AED 6000, or roughly USD 1650, in yearly rent. It wasn’t the nicest, and the electricity or water was oftentimes unreliable, but it was home. There’s a quote by Abraham Lincoln which goes ‘good things come to those who wait, but only the things left by those who hustle.’ Where I grew up, everybody around me was patient – waiting for their next promotion, waiting for their salary increase, waiting for their upcoming vacation. I owe a lot to my upbringing because it showed me the life I didn’t want to have.
True to Lincoln’s words, I began hustling at an early age. When I was 15, I launched my first company with a friend, and we began organizing informal football tournaments for our fellow students. Every day, we would skip school and take the metro to a nearby facility with indoor pitches, where we would pitch prospective ‘customers’ to participate in our tournaments. Every tournament would last 7 hours and would make us AED 5000 in profit, each. In essence, at the age of 15, I was out-earning my parents on an hourly basis.
For my Bachelor’s degree, I enrolled at the University of Iowa in the United States. Technically speaking, my degree read ‘Economics’, but it should have read ‘life’. There’s just something about the way Americans do things that have always fascinated me. A German band named Rammstein once wrote a song called ‘Amerika’, in which, if you read the subtitles, you’d realize that the lyrics were about how people may live in their countries, but in truth, from McDonald’s to Apple, to Nike, to Hollywood, everybody lives in an extension of the US. I spent 4 years in a country on the other side of the world trying to understand this.
It was at Iowa that I noticed a problem with our current education system. In an Economics 2000 level class one day, I was in the middle of a WhatsApp conversation with my dad when I looked up and noticed that everybody else was also doing the same thing. In our collective defense, it was a boring class, so in hindsight, we deserve some leniency. But, I remember thinking to myself – if everybody was on their phone, or tablet, or laptop, who was learning?
I immediately shelved my plans for a Master’s degree and began working on concept designs and process flows for how we could tackle this problem. I connected with a development team in India and would spend my nights Skyping with them trying to understand the technical aspects of what would be required. There, in my tiny apartment in cold and rusty Iowa City, Lock & Stock was born.
I find Lock & Stock to be one of the most unique concepts for an app. What gave you the confidence to develop this app and be so sure that it will catch on?
When it comes to launching anything, there are two key components. The first is funding. After the initial concept, designs and processes were ready, I immediately pitched the one person I knew I could rely on, my father. I pitched him an idea – an app that would keep students from using their phones while in a class by rewarding them with offers and discounts, and I shared with him a financial presentation that detailed how much start-up capital we would require to properly bring this idea to life. I didn’t even try to convince him, because I knew that if we were going to work together on this project, it had to come willingly, from the heart. He took a few days, but eventually, he called me, said we were in business, and joined Lock & Stock as Co-Founder and Chief Operating Officer.
There’s a saying which goes ‘behind every successful man there’s a successful woman’, and I think my mother deserves a tremendous amount of credit here. She’s been the only income earner at home for the past couple of years, as dad and myself invested everything we had, and reinvested all earnings along the way, into building the company into what we believe it can be. She’s our backbone, and her fortitude and resilience are the reasons we are able to concentrate on growth at all costs. Without the belief of my mum and dad, Lock&Stock as an entity, and all the students’ lives that we have touched along the way, would be just a dream.
The second is faith. A wise man once said ‘blessed are those who believe yet cannot see.’ Aside from the fact that I was 20 years old when we launched this company, an application like Lock & Stock did not exist on earth at the time, never mind in the UAE. Will students lock their phones? What would be our business model? Will brands or other businesses be willing to partner with us? And how will we acquire them? These were questions that I honestly did not have answers to at the time.
Through what felt like an infinite number of sleepless nights, one person more than any other helped keep my belief intact. It’s quite funny because she didn’t really buy into the idea at first. If my memory serves me correct I think we were at Johhny Rockets in the middle of a classic burger/milkshake lunch combo when I pitched her the concept for Lock&Stock, and all I remember was her having a bewildered look on her face as she burst out laughing and mumbled ‘good luck getting kids to lock’. I’m not sure if I ever quite brought her around to the idea, but I wouldn’t have been able to do this without her. Every time I seemed ready to call it quits, she would keep me going. Every time I began to slack, she would set my priorities straight. It’s fair to say that without her, somewhere in the three months of planning before our launch that went into building the foundations of this company, I would have lost faith. We don’t talk much anymore, but I will forever be grateful to her for being my support system. This company would not exist without her. Launching a startup requires a tremendous amount of faith, so find your support system and never let him or her go.
You’ve now gone global, but you’ve been vocal about how hard it is to get brand partners for an app that provides discounts. You’ll need a lot more support as you’re expanding. How prepared is the organization to take on the world? Why should potential brand partners pay attention to this expansion? And, which is the country Lock&Stock thinks is their most bankable market?
Digital addiction is not a UAE specific problem, but rather something that affects students everywhere. Thus, in March 2020, we opened Lock&Stock to students from around the world. Today, any student, at any school or university, in any country on Earth, can lock their phone, start earning rewards, and use their rewards to connect with our Offers, Jobs, or Scholarships partners available in that country. Of these three platforms, Scholarships is the most scalable, as universities do not have any geographic constraints on offering scholarships to students.
Of our 300 plus Scholarship partners, most are available in all countries. Offers and job partners, on the other hand, are country, or even city-based, and are thus much harder to source. Our key focus regions, at least for the medium-term future, are the GCC, India, and Pakistan, which, because of their proximity to our headquarters in the UAE, are easier to work with, logistically speaking. At the time of writing, on a global level, we have over 20 brands on board in Saudi Arabia, Kuwait, and India. We aim to have over 50 brand partners in 12 countries, not counting the UAE, by mid-2021.
An app like Byju’s got a huge backing from Facebook and Tencent. Do you think that on the times we live in the biggest backing for any education sector app is social media? Can any business that looks to make a global expansion afford to not have such alliances?
I think any ed-tech startup or any startup in general that is seeking scale requires a quality team of investors. The startup needs to have venture capitalists or investors that believe in the mission, the cause, and the idea, and are not simply seeking an immediate or quick return on their investment. These are investors who will stick with you through bad times, and bad times are always just around the corner. Furthermore, they bring with them not only assured access to capital, but also quality advice. Once you have the capital and advisory team in place, your startup will fly.
I don’t think it’s necessarily a requirement that this funding comes from a company within the social media space. As long as your investors are strategically placed, either directly or indirectly, in an industry that is of value to your startup, it will be a good match.
A country like China has called for its people to lead the world in AI innovation. Hundreds of AI companies entered China’s education market. Millions of their students have enrolled in online learning programs since then. There are even TV shows where human teachers compete with computers to find out who teaches students more mathematics over a week. Such is the popularity of online learning. Shouldn’t other countries take a leaf out of this book in promoting the use of AI in learning?
Personally speaking, I think we are years, or maybe even decades away, from when a computer can successfully pass the Turing test, which is where it can convince a human being that it is not talking to a computer. Until that point in time, artificially intelligent computer-based learning will play only a fringe role in direct education.
I think the true impact of artificial intelligence is not on education itself, but on how it has impacted the education industry. Artificially intelligent prediction algorithms have made information ubiquitous, to the point where the education system must now focus on teaching students to analyze rather than memorize. AI-powered financial predictors, diagnostics, legal discovery, navigation, etc. will change how we do things, and will thus change how the education sector will teach the next wave of young adults, shifting the workforce from a production mindset to a focus on creation, design, and analysis.
Tech startups in the MENA region are estimated to have got $704 million in funding in 2019. This has inspired several young entrepreneurs to start their companies in the hope that they too can get funded. Will the virus outbreak and the current pandemic prevent the VCs from funding these young companies?
The Middle East was already a challenging environment for young startups, with access to funding scarcer than in most other parts of the world, especially the US, Europe, India, and China. Investors in this region, due to a lack of strong laws to protect their financial investments, tend to favor less risky bets, with real estate being the big winner. While you mention that $704 million were disbursed in equity funding in 2019, the number of startups funded dropped, with investors mostly pouring capital into second or third round investments.
This already weak environment will be further impacted by the COVID-19 pandemic. We don’t know when a vaccine will be developed, or when the lockdowns will end, or when things will return to ‘normal’, and this uncertainty is killing business sentiment. As such, venture capitalists will begin to hoard capital until after the crisis is over, new startups will find it next to impossible to acquire meaningful capital raises, and companies that previously ran on VC-funded, growth at all costs models will find the going tough.
Despite the ease of doing business in the UAE ranks 25th, starting a business is expensive compared to countries like even the US. A good part of the UAE’s GDP comes from SMEs. Considering this, don’t you think it’s time that the whole procedure becomes a lot more flexible and affordable?
Speaking from personal experience, I think a lot can be done to make the UAE more conducive to startups and entrepreneurs. The world’s greatest technology companies were founded in universities [think: Google], or garages [think: Apple and Amazon], and operated lean models from there until they scaled their businesses. In the US, a commercial license costs a few hundred dollars. In India, it is the same.
However, in the UAE, no startup can conduct business without a license and office space, which together will amount to roughly USD 3000, upfront. On top of this is the cost of acquiring a work visa for every employee, which again amounts to roughly USD 2500 per visa. This system favors established organizations and large companies and is a major strangle on technology startups which more often than not cannot afford substantial upfront costs. In my opinion, it is the primary reason why many young founders in the Middle East trade life as an entrepreneur for life in the corporate world.
How involved is your company in CSR activities?
Corporate social responsibility is embedded in Lock & Stock’s DNA. We founded the company out of the desire to keep students off their phones where it matters most – in our classrooms, and to provide them with rewards to positively incentivize this behavior. I feel that we have done a tremendous job of doing just that here in the UAE, and are now set on impacting the lives of students around the world. In our 2 years of operation, we have accounted for over 150 years of combined time spent offline in classrooms, time that has been returned to teachers, professors, and educators. More than anything else, this is what I am most proud of here at Lock&Stock.
On a separate note, a year ago a student who had applied through our Scholarships platform for a fee waiver to one of our partner universities approached us and told us how one of his parents had just passed away, and how even after the fee waiver from Lock & Stock this unfortunate event would severely impact his ability to finance his university tuition.
I remember sitting in the meeting as one of our team members who had interacted with the student recounted the heartbreaking story. The team unanimously agreed to provide the student with a 100%, fully funded semester’s worth of tuition, until his family could get back on their feet. Since then, to support the community which is the very essence of Lock & Stock, we have made the 100% semester scholarship a permanent fixture, and every semester one deserving, underprivileged student is provided with this scholarship to the University of his/her choice.
Have your company been able to quantify the improvement in the academic performance of its students after using the app?
Lock & Stock is two and a half years old, and much of that time was spent trying to build out our operations, partner network, and business model as is the case with most young companies. However, measuring academic performance improvement is something that has long been on our agenda. Honestly, I would love to walk into a meeting with a school or a university tomorrow and actually show them cold, hard data about how we are positively impacting their students academically, at no cost to either the student or the institute. Secondary research studies all point to the conclusion that we are in fact having an impact. Lock & Stock helps students fight anxiety and digital addiction. Studies have demonstrated how lower levels of anxiety and digital time yield higher levels of information retention and mindfulness, which in turn result in higher test scores and exam performance. We just need to link it all together.
We have very recently begun discussions with a market research firm to conduct a focus group study that measures the change in the academic performance of a select group of students over two academic years. We hope that this study finds a definite direct correlation between Lock & Stock usage and academic performance. These results won’t be out until late 2022 though, but I promise you I’ll give you a call once they are.
Will your app update to more additional features over the coming months?
One of the key mantras at Lock & Stock is to innovate or die, and we firmly believe that what got us to where we are in the present may not be what takes us to where we want to be in the future.
One of our key strategic focuses is to further gamify the Leaderboards section of Lock&Stock, which ranks students against each other based on the number of minutes they have locked their phones. Hopefully, someday soon, we will be able to see students from Dubai, Mumbai, Hong Kong, Berlin, and Rio de Janeiro all compete on the Lock&Stock Leaderboard by staying off their phones. We have even considered allowing students to compile their lists of ‘friends’, and then track their time spent offline specifically against them.
Many of our plans for this are still at the drawing board stage, but stay tuned for more on this one.
