I.I. Chundrigar road. It is the central business district of the country’s financial hub – Karachi. This is where all of the movers and shakers of Pakistan’s business and entrepreneurship elite find themselves. It is the focal point from which money moves and decisions that affect business lines from Karachi to Kashmir are made.
And nestled at the heart of it is the Schon Center. Sleek, tall, and impressive, the center is much like the man that runs the show from the inside. In an extravagant 10 marla office stretched over the top floor of the center, Danial Schon has a keen mind and a sharp eye. As we speak to the billionaire business magnate in his luxurious office, his voice changes when he talks about business. It takes on a passion that commands attention.
Businesses are always in the public eye. Big buildings bearing names, private planes, luxury cars all grab the public’s attention, but it is the personalities of the stakeholders that keep them rapt. Even by the sharp standards by which we judge these personas, Danial Schon is charismatic and seems to possess a can-do-attitude.
The Schon group has been around for half a century now, and it has seen highs and lows throughout that, but has persisted and thrived through all of it. In recent years, ever since joining the business, Danial has been a revelation, delivering 1.65 million square feet of property for his real estate development business. Wesat down with Danial to talk about business, life, and everything in between.
The Schon Group
Founded in 1971, the Schon Group was the brainchild of Tahir H Schonand Nasir H Schon, who are still Chairman and Co-Chairman of the group. While the senior Schon started off in Singapore and then made his fortune in Pakistan, Danial has worked tirelessly to build a global brand which had till 1996 grown into Airlines, Banking, Fiber Production, Real Estate Development, Fintech, and other verticals, when the group was forced to move its headquarters to Dubai.
When the company was moved to Dubai, Tahir Schon and his brother, Nasir, worked hard and started in real estate. They had a very innovative model wherein they would buy a building with all 2-bedroom and 3-bedroom apartments, reconfigure the building into all studios and 1 Bedroom apartments, thereby, increasing the rental and sales value. When Danial speaks of his father and uncle, he speaks with pride. For any large business group, its heirs can make it or break it. To Danial’s credit, he is aware of the Schon group’s history, and what they stand for, and he wants to build on top of that foundation.
“They were averaging returns up to five times on invested capital every 2 years. Their main focus was also to increase rental income. They grew with the city of Dubai and built a successful business model,” Danial tells about the beginnings of the Schon group.
But he also is aware that the group is now working in a new era, one that requires new thinking. Spearheading this new era with his own brand of business has been Danial, and his journey has been vital to his current success. Born in New Jersey, he grew up between Karachi and Manhattan, and lived in Dubai, London, New York, and Karachi. It was these vast experiences that helped Danial navigate the diverse range of businesses he would venture into. But the most important factor for him has to be an entrepreneurial spirit.
A graduate of the prestigious Kelly School of Business at Indiana University in Bloomington, Danial started two businesses while he was still in school. “I never liked to study. There was too much theory and very little praxis. One business I started was a delivery service for incoming college student’s furniture, and the other was a fashion design label. We held many fashion shows and it was a lot of fun. I loved the glamour of the fashion world and would love to go back someday to that field.”
Danial joined the family business full time at the age of 21, right out of college in 2001. Having closely observed his father over the years, it was like a fish taking to water, and within three months he made his first deal, earning a $27 million commission for his company at the age of 22. But this was not the case of a young business heir being swooping in and taking credit. Tahir H Schon had high hopes for the Schon group, and wanted his sons to learn and grow on their own within the business.
“Entrepreneurship is in our blood,” he says. For Danial, not only does it come naturally, entrepreneurship comes with its own codes and traditions. “I have learned business from my father, who taught me the most important lesson: ‘To get, you must give. Always think about the other person’s benefit. If he benefits, so will you.’ The business ideology I learned was humanitarian, not capitalist.”
There were many moments of crisis that Danial had to navigate through as well. The group went through a crisis in 1997, when Danial was still new to the business. More recently, in 2018, the Dubai real estate authority had moved against major players in the Dubai real estate market – one of which was the Schon Propertiesand very recently Arabtec has file for bankruptcy in Dubai. However, throughout all of this, Danial persisted. Against all odds, he managed to deliver 1.65 million square feet of property for his real estate development business.
“Technically, I was self-made, as being in a structured family business, we were always kept on a small salary,” Danial explains. “When I graduated, my salary was USD $ 1,700 per month, and from there when I made my first deal of USD $ 27 Million, my hands were shaking when I took the check. I remember the feeling till today,” he says, even now buzzing with excitement.
“The stories of my business record are filled with dizzying highs and lows like every entrepreneur. I faced my fair share of drama when the Dubai property market tanked,” he says. But Danial stood his ground and restructured his businesses, delivered his projects, and survived the recession to fight another day.
Danial has delivered over 1.65 million square feet of property globally and won numerous accolades over the years for his contribution to business. His group carries a global USD $2 billion global portfolio. But another aspect to Danial is his diversification of his personalbusiness interests. Outside of real estate development, he is involved with private market investments, the tech sector, hospitality, and fintech. As a business tycoon, he has global business interests and is well diversified.
Pakistan, business, and beyond
While he has business interests all over the world, Danial is naturally a close watcher of Pakistan and Pakistani business, and one of the areas he has invested in and feels is on the rise is the technology market. By his estimations, Pakistan is the most undervalued technology market in the world.
“Pakistan has a population of over 250 million persons, huge room for further mobile and internet penetration, with 65% of the population under the age of 30,” he says. “This growing young population makes Pakistan the biggest technology market to come on the world stage.”
“The technology sector is missing fintech services such as payment solutions. Once payment solutions come into play correctly, the monetization of the sector will start, and the future will be huge. A decade from now, these tech companies will be the most powerful companies of the country.”
Of course, one cannot think about the Schon group without thinking about property. And even in regards to this, Danial is hopeful for Pakistan. And again, it is in the country’s youth that he has his hopes invested. “Pakistan has one of the world’s largest housing shortages of around 11 million homes. With a population growth rate of around 5 Million people every year, this number only increases,” he says.
“Karachi’s price per square foot is 90% cheaper than any other metropolis with similar populations, such as Mumbai, Tehran, Bangkok, or Delhi. Islamabad and Lahore are significantly undervalued. Pakistan’s upcoming Tier B cities in Sindh and Punjab especially are hugely undervalued. I believe the best investment in property in Pakistan is creating shopping malls in Tier B and Tier C cities. That offers the most value today for developers and buyers,” he says.
“Overall, you cannot go wrong buying real estate in Pakistan. The pent-up demand is too big, transactions are still done on equity with minimal financing, and there is only one direction the market will head: upwards.”
A man of faith, Danial attributes his business ethos to his faith. “I am a practicing Muslim, and I believe that Allah has sent us here to worship him and to do good deeds,” he says. “Fundamentally, that is our job description and our reason for being. Life is about helping others. My belief is that Enterprise and entrepreneurship have the ability to solve all social problems, hence, it is every entrepreneur’s duty to work in helping others set up enterprise.”
This is the humanitarian ideology he spoke of earlier, one that believes in uplifting people. Danial’s favourite quote that he likes to relate to people also comes from the Prophet Muhammad, and it is the instruction that “The best of people are those who are most beneficial to people.” This is what he wants to do with his business, and it is the central tenet that he follows in everything.
For example when hiring, the first thing he looks for in a possible candidate is that they are good-hearted. There is no test for this, so it is just something he has to find. “The person must have a good, clean heart,” he says. “I think Warren Buffet once said, ‘You can’t make a good deal with a bad person.’ That is something I believe in.”
He also only hires people that are extremely positive like him. According to Danial, a negative person is a buzzkill and not good for the work environment and morale.
“Next is hunger. This is so important. Hunger is one of the biggest attributes for success. The passion for achievement and dedication are very important qualities for me,” he says. It is also these rules and this attitude that he encourages other young entrepreneurs to have.
“You must not ever give up. You will have ups, and eventually you will have downs. You only fail when you give up, so never fail, never give up,” he says. “And remember, what you give is what you get. Newton’s law, that every action has an equal and opposite reaction is not just limited to physics. You must give to get. If you practice this in business and life, you will always succeed.”
“For me, success is not about this world. The definition of success for me is going to heaven, that is it. How do you go to heaven? You do good deeds and worship your Creator. Life is a test, and we must always know this and treat it as such. To define success in monetary terms is living in a fool’s paradise,” he goes on.
“But if someone were to ask me what business is about. What success is about, I would say business is about creating sustainable ecosystems where all player’s benefit. An entrepreneur’s job is to create win-win situations.”