For a few months now, one question has been on many Moroccans’ lips: is daily deals website MyDeal.ma really “on hold, to rise from its ashes” as their website is putting it, or has it simply shut down? Whatever happened to the first Moroccan daily deals website?

On Friday, a new development seemed to confirm the second option: MyDeal’s website has stopped working. So, now, can we actually say that the website that processed $4 million USD worth of sales its second year is dead? 

The story is more complicated than it appears at first sight.

We talked to Mounia Rkha, co-founder and former manager of the startup, and Nabil Sebti, current manager.

How MyDeal made Moroccan ecommerce

MyDeal.ma got off to a promising start in early 2011, as a team of seasoned French and Moroccan e-commerce entrepreneurs and investors decided to venture into the then non-existent Moroccan e-commerce sector, hoping to benefit from a first-mover advantage.

Behind the project was Mounia Rkha, an analyst at the famous French VC fund Ventech; she was later joined by three co-founders taking the role of strategic advisors. These were Lara Rouyrès and Tatiana Jama, then co-founders of Dealisissme, a French daily deals service that was sold to LivingSocial a year after it launched for more than €3 million, and Jonathan Benhamou, founder and CEO of Novapost, a HR digitalization service that recently raised $17.5 million USD to continue its expansion in the U.S. Karim Zaz, former CEO of Moroccan telco Wana, which later became Inwi, joined them as majority shareholder. 

Launched in January 2011, the website boomed. By the end of the first year, it had overcome its revenue’s provisions, had 25 employees, and raised 2 million DHM, almost $240,000 USD, from MNF. In 2012, the company sold for $4 million USD worth of deals. For many Moroccans, MyDeal.ma was the website on which they made their first online purchase, claims Rkha.

The website’s success, she believes, comes for two first-mover advantages. The first one came from being the first website in the daily deals field – even if did not last long since. Not even a month after MyDeal.ma launched, Hmizate joined them in the market, followed not so long after by with Superdeal.ma. The second one came from being the first in the hotel daily deals.

Why MyDeal needed to pivot

Despite their early success, the co-founders had to face the fact that this business model was not viable internationally, and by extension in Morocco. The board then accepted Rkha’s decision to turn MyDeal into a cluster of websites offering various online services, like ticketing and reviewing, leveraging their existing user base.

In May 2013, Rkha stepped down to go back to France. She left the company confident since the pivot was already underway. She had launched three websites including MyDealMarket, helmed another round of fundraising, and most importantly, left the company to a manager she trusted, Nabil Sebti. Having a new face, she believed, would help MyDeal change its identity and position.  

But the pivot didn’t go as planned, and sales and liquidity plummeted. From where she now stands, Rkha believes the company “focused too much on new activities that didn’t pay enough, and neglected the cash cow that was the daily deals.”

Sebti agrees that there was a lack of focus: “too many services were launched when MyDeal was still in full boom,” he explains. One of the consequences was that the team had to recruit, and grew up to 40 employees, a real strain on the cashflow of the company. So, the first thing that Sebti did when he started as manager was to shut down, with the board’s support, some of the new services. Still, he doesn’t believe that MyDeal.ma neglected the deals, but rather that the resources were misallocated.

Rkha also believes that the company saw too many strategy changes to prove trustworthy to investors whose money the company so badly needed.

But it’s not the pivot that drove MyDeal to its current situation. The former and current managers agree, the startup could have climbed back up. The situation actually did begin improving; in September 2013, the startup made its first profit, and an international investor agreed to invest, says Sebti.

An uncertain death

No, the current situation can be blamed on an incident that MyDeal had no power over: majority shareholder Karim Zaz is currently in Moroccan custody for legal issues that have nothing to do with MyDeal.ma, but still that prevent the board from taking any decisions. It’s a very sad situation, says the manager, for the startup of course, but also for Zaz and his family. Despite everything, Sebti wanted to remind us of the key role that Zaz played at MyDeal.ma, and all the experience he brought.

Still, the company is not dead, says Sebti to Wamda, “The company still exists legally and I’m still its manager.”

Could this situation have been avoided? Yes, believes Sebti. “If the company had been a public limited liability company (an SA in Moroccan legal terms), this would have been much simpler because the administrative processes are more flexible. If Karim Zaz and I weren’t co-managers, this would have been less difficult,” he continues. “And, more importantly, if Karim Zaz hadn’t been the majority shareholder, this would have been easy.”

What lessons can be drawn from this story? Unfortunately, he explains, Moroccan entrepreneurs don’t have much choice: unless they have 300,000 dirhams when they launch, they have to settle for a SARL-status company. One thing they can do is think about management from the start: who manages the company, whether decisions are made by the executive, by majority, or by unanimous agreement, etc.

This story is a harsh reminder that a startup’s fate has a lot to do with luck. Even the best-managed startup can fail due to bad luck. Bad luck can come from a financial crisis, and the investment lock-down that goes with it, like what happened to business social network Unyk, or from a political incident happening at the time of the launch, like what happened to Digital Mania and its game Tunis 2050.

But, entrepreneurs can still protect themselves from the effects of those incidents by making sure they always have enough cashflow, thinking abut their emergency management, and by being ready to learn from their failures and pivot, similar to what Digital Mania and Unyk have done.

Will MyDeal rise from its ashes? Maybe. But even if it doesn’t, this experience has led its team to learn a lot, and we can be sure that all this knowledge will be put to good use when they join other startups, or even launch their own.