The Triumphs and Struggles of Arab Startups

Personally, I believe that the essence of entrepreneurship is chaos, problems, uncertainty, ... all the things we complain about in the traditional sense. Problems are an entrepreneur's best friend; even without a perfect ecosystem, traditional companies, big and old structures might not function very well. But local hustlers who really want to succeed have no reason but to hustle their way through the chaos and offer a much better alternative than the established dull monopolies. It is becoming easier with the disruption that is taking place. The Triumphs and Struggles of Arab Startups DUBAI – The recent STEP conference in Dubai – the biggest startup conference for the Middle East and North Africa (MENA) region – attracted a lot of buzz. It seemed to indicate that the region’s startup scene was coming of age. Yet MENA entrepreneurs are still facing serious structural impediments to progress. The successes of the region’s startups should not be underestimated. According to Wamda, a regional accelerator platform, more than a dozen startups – including Bayt, Careem, MarkaVIP, Namshi, News Group, Propertyfinder, and Wadi.com – now have estimated valuations above $100 million. Souq.com, a 3,000-employee company founded in 2005, is poised to be the region’s first “unicorn,” with a valuation above $1 billion. minting money Central Banking’s Final Frontier? Anatole Kaletsky weighs the views of Raghuram Rajan, Adair Turner, Stephen Roach, and others on how far today’s increasingly exotic monetary policies can and should go. Yet the regional environment remains far from conducive to entrepreneurship. Beyond the wars, terrorism, and political turbulence plaguing the Arab world – not to mention the usual challenges facing entrepreneurs outside Silicon Valley, such as lack of adequate risk capital, talent, or infrastructure – is a slew of deep-rooted structural problems. One of those problems relates to enterprise demographics. According to one study, in 2011, family businesses represented up to 70% of the MENA private-sector economy – a higher share than in any other region. This means that a large segment of the business community raises funds, shares equity, and manages operations within small, tight-knit social circles. The conventional wisdom of drawing on friends, family, and fools for new business endeavors seems to translate in the MENA region as, “If you are not a friend or family, you must be a fool.” While this might help to contain risk, it also fosters a risk-averse business culture. And yet a willingness to take risks is pivotal to innovation and entrepreneurship. Moreover, keeping businesses in the family reduces their disruptive potential, even when they do manage to innovate. This family-oriented, or “tribal,” business culture is the result of a long history of inefficient commercial judicial systems, arbitrary nationalization programs, and a lack of effective corporate governance. While most countries have made improvements on these fronts, the tribal business tradition remains entrenched, and will take time to dislodge. But steps can be taken now to help mitigate some of the problems associated with this business culture, such as a lack of availability of adequate risk capital for new entrepreneurs. In Lebanon, for example, the central bank has launched an unprecedented startup support initiative, Circular 331, through which it guarantees up to 75% of risk capital made available by local banks, amounting to up to 3% of their assets. Since its launch in 2013, the program has generated more than $400 million in risk capital. A second major hindrance to innovative entrepreneurship in the MENA region lies in the way governments manage their critical role as clients. Through the procurement of goods and services – which comprises about 10-15% of GDP in developed countries and up to 20% of GDP in developing countries – governments can serve as important drivers of growth and innovation. Silicon Valley’s genesis and growth, it should be recalled, was propelled by government contracts and procurement. But in MENA countries, the conditions for doing business with the government – including tendering requirements, payment schedules, and bureaucratic demands – tend to be prohibitive for small firms (10-50 employees). With small businesses unable to access the market for public goods and services, they miss out on important opportunities to mature and expand, which limits their capacity to spur broader economic growth and development. A third major impediment to innovative entrepreneurship in MENA countries relates to the industrial structure. Construction, banking, telecommunications, tourism, and traditional manufacturing represent a significant share of the region’s private-sector economy. Companies in these industries tend to be not only family-owned, but also large in size and heavy in capital investment, and they do not typically view startups as potential strategic business partners. All of this implies high barriers to entry for new businesses, which face severely limited opportunities to disrupt, spin off, or even leverage major industries. Even startups that make some initial headway struggle to scale up in the B2B sector. Unsurprisingly, in these major industries, disruptive entrepreneurship and innovation tend to arrive slowly and late. While telecommunications is something of an exception in this sense, even its development is hampered by government regulation. MENA startups have achieved the most success online, where the large established players did not show early interest and barriers to entry, in terms of capital investment and market access, are relatively low. Indeed, most of the successful companies in this domain sell directly to consumers and conduct transactions via digital payment services that enable them to avoid transactional barriers, such as government procurement regulations and high bank fees. Support Project Syndicate’s mission Project Syndicate needs your help to provide readers everywhere equal access to the ideas and debates shaping their lives. LEARN MORE The progress that such startups have managed to achieve highlights their potential to spearhead innovation and generate economic growth. It should thus serve as a powerful incentive for MENA governments and businesses to change their approach. Specifically, governments should do more to leverage their spending to support new, innovative businesses, while established companies should open up their operations and cooperate with startups to scale up innovative activities that can inject dynamism into markets. Startups are proven hubs of innovation and drivers of economic growth, employment, and development. It is time for the MENA countries to make the most of that potential.

This is the revolution in the Middle East that President Obama is missing

This entrepreneurial revolution doesn’t fit with Americans’ violent, one-dimensional view of the region By JESSICA ASHOOH TEDxKids@Riyadh Youtube screenshot President Obama’s expansive foreign policy interview with The Atlantic’s Jeffrey Goldberg has generated enormous controversy both within Washington and in foreign capitals, as America’s longtime friends and allies recoil at the president’s insinuation that they are “free riders” on American security. Yet Free Ridergate has effectively given a pass to an even more revealing statement from the president. In justifying his pivot away from the Middle East, Obama contrasted it with the positive example of Southeast Asia, which, he said, “is filled with striving, ambitious, energetic people who are every single day scratching and clawing to build businesses and get education and find jobs and build infrastructure.” This comparison, shockingly uninformed, says far more about the blind spot in Obama’s worldview than it does about either Asia or the Middle East. There is an entrepreneurial revolution happening in the Middle East that doesn’t fit with the violent, one-dimensional view of the region that Americans like President Obama hold. Beyond the noise of the ISIS horror show, young Arabs are seeking education and starting companies at record levels, using technology to improve not only their personal prospects, but also their societies. With its strict Shariah law and a stubborn prohibition on women driving, most people don’t see Saudi Arabia as a vanguard of innovation. Yet the Kingdom is quietly becoming a hub for the dynamic and positive change that is swelling up throughout the region—with the full support of the highest levels of Saudi government. A recent trip to Riyadh included a visit to the Prince Mohamed bin Salman Foundation (known by the acronym MiSK), a state-funded incubator for startups that seeks to instill in young Saudis—both women and men—the skills necessary for entrepreneurial success. Many of these lessons might be familiar to anyone who has spent time in Silicon Valley, including things like how to pitch funders, and perfecting the art of the TED Talk, which Saudi youth start early—MiSK organizes TEDxKids@Riyadh, where girls and boys as young as 9 make polished presentations to an audience of thousands. The MiSK program also includes coaching on surmounting the cultural obstacles that are more unique to a conservative Arab society, like traditional stigmas surrounding failure or taking an unconventional path. While the MiSK example might sound like a one-off that can’t scale to broader societal transformation, the data show otherwise. HSBC’s Essence of Enterprise report, released in March, revealed that the U.A.E. and Saudi Arabia have the highest proportion of millennial entrepreneurs in the world, at 63%, with the average age for starting a business being just 26. Surveys show young business leaders are “more focused on how they can benefit the broader community” rather than merely enriching themselves. Entrepreneurs under 35 also tend to create more than twice as many jobs as older business leaders, with each millennial startup employing an average of 123 people. Furthermore, young entrepreneurs in the Middle East are more gender-equitable. According to the The Economist, women make up 35% of the region’s tech entrepreneurs. They are even outpacing their sisters in the U.S., where, as the Kauffman Foundation reports, only 3% of tech startups are women-led. http://www.marketwatch.com/story/this-is-the-revolution-in-the-middle-east-that-president-obama-is-missing-2016-04-06

Middle East Sees Rise of Start-Ups

Middle East Sees Rise of Start-Ups Madeleine Moreau and Global Risk Insights These days, news from the Middle East tends to revolve around violence, war and low oil prices. In the midst of the challenges these forces pose for the region, young Arab entrepreneurs are seeking creative ways to tackle existing civil society problems. From Morocco to Jordan smart, talented thinkers are creating an impressive start-up culture in the region. As a result, financial institutions and non-government organizations have begun setting up numerous seed investment initiatives to support this rise in cultural innovation. Overcoming education and funding challenges There are many civil society issues that plague the Middle East. Among these include the need to diversify energy sectors, improve access to fresh water, education, women’s rights, transportation, and healthcare systems. Young entrepreneurs from across the region are seizing upon the opportunity to improve civil society by developing start-ups addressing these issues. This boom in creative innovation has led to the wide proliferation of private institutions and NGOs that target the needs of young businesses. Specifically, they offer greater access to capital and business development training, two challenges young start-ups often face in competing in new markets. Jordan, Lebanon and Egypt lead the seed investment culture for start-ups. While the UAE hosts important start-up events throughout the year, young entrepreneurs have found it harder to test out a new idea in the lucrative UAE market. There are numerous start-up incubators in the region. Below are some of the most notable: Oasis500: Oasis500 based in Amman, Jordan offers training, mentorship guidance, business incubation and additional follow-up investment and funding to help entrepreneurs grow their companies. It hopes to achieve the goal of seeing 500 start-up companies in MENA in five years, focusing primarily on the Information Technology (IT) and Digital Media sector in Jordan. Dakwak: Dakwak is a unique translation and localization platform based in Jordan that allows small businesses to translate their websites into over 60 different languages, thereby encouraging internet visibility for consumers. Wamda: Wamda offers similar entrepreneur training for start-ups in Jordan, Lebanon and Dubai. It places an emphasis on community development, media, research, and advisory services, all key aspects to growing a network before entering a new market. Bader: Bader in Lebanon hosts numerous events annually to encourage competition and bring new ideas to the forefront. The StartUp Cup sponsored by Bank Audi offers 100,000,000 Lebanese Pounds (LBP) to winners of the event. Berytech: Berytech seeks to promote economic growth within Lebanon, targeting talented recent college graduates as a way to generate wealth and job creation. It holds regular start-up weekends, local and international exhibitions and workshops, as well as mentoring services for Lebanese entrepreneurs. AltCity: AltCity supports high-impact entrepreneurship in Lebanon by offering startups crash courses in investment strategies to push new companies into the market faster. Its Ultralight Hackathon Yerevan event offers eight hours of intense hackathons, followed by idea sessions and public pitching/judging sessions. Cairo Angels: Cairo Angels is a forum for investors to find high potential start-ups. It consists of a small group of investors who invest in early stage companies using a high-risk, high-return matrix. They offer the necessary funding and networking for start-ups to launch their businesses while providing potentially high returns on investment. Shekra: Shekra, drawn from the Arabic phrase “sherik fekra” meaning “share an idea,” in Egypt uses crowd-funding to support entrepreneurial initiatives. Unlike other crowd-sourcing platforms, it relies on a closed network of investors so as to ensure trust in investment opportunities. Flat6Labs: Flat6Labs operates out of Cairo, Jeddah and Abu Dhabi and serves as a regional startup accelerator program, offering a competitive mentorship program to educate entrepreneurs about the market they are trying to tap into. It also provides funding and networking opportunities for Arab youths. Bright future for startups The proliferation of seed investment firms across the region demonstrates the enthusiasm and talent the Middle East startup culture has to offer. Though youth unemployment remains high in the region, these creative incubators offer an opportunity for creative thinkers to build a business and tackle civil society problems left void by governments. Wael Fakharany, Google’s agency lead for the Middle East and North Africa emphasizes the importance of this trend for the region: “Today, a young entrepreneur can develop cloud and mobile-based applications that can change the world and influence hundreds of millions of people.” While news of ISIL advances and low oil prices are a sad reminder of the challenges to Middle East investment opportunities, the proliferation of hundreds of start-up incubators and small businesses brings an important sense of optimism to the Middle East.

International A new VC firm announces $100 mn fund for Middle East, Asia, US

The Fenox Global Fund IV will seek to invest in information technology startups - including Internet, computer hardware and software, communications, and healthcare technology.

DUBAI: A new venture fund 'Fenox Global Fund IV' seeks to invest US $ 100 million in the US, Asia and the Middle East.

The fund has been established by Fenox Venture Capital, a global investment firm headquartered in Silicon Valley, in partnership with Innovation 360, a leading innovation consultancy based in Dubai, UAE.

The investment would be undertaken in seed, Series A and pre-IPO funding, according to a report.

Fenox's current investment portfolio includes those in Dream Link Entertainment (DLE), the largest animation company of its kind in Japan that recently executed anIPO on the Tokyo Stock Exchange, and Lark, a wearable technology company whose products are now sold at Apple stores around the world.

Now open to investors in the Middle East, the Fenox Global Fund IV will seek to invest in information technology startups - including Internet, computer hardware and software, and communications - as well as startups in the area of healthcare technology and clean tech.

The fund strategy is to invest in a mix of start-ups in need of seed and Series A funding in the Middle East, pre-IPO companies from Asia, and seed and Series A start-ups in the US - particularly Silicon Valley.

"We are breaking new ground in the Middle East with the Fenox Global Fund IV. I know of no other time that aSilicon Valley VC has used capital from Middle East investors to promote entrepreneurship in the local region," Brent Traidman, General Partner at Fenox, said.

Kamal Hassan, Fenox General Partner and president of Innovation 360, said: "Fenox sees the huge opportunity for growth in the MENA (Middle East and North Africa) region, and so we are offering funding and expertise to a few best-in-class regional startups who we believe will provide significant long-term gain.

"However, by also investing in more mature companies from Silicon Valley and Asia, the fund will diversify the investors' portfolio and create a greater return for investors," said Hassan.

Fenox has a track record of investing in global businesses from around the world, having managed funds that focus on entrepreneurial development in South Korea, Singapore, Japan, Indonesia and China.

Zoomaal : a crowdfunding platform for Arabia

Zoomaal brings crowdfunding revolution to Arabia. Crowdfunding has taken the world by storm, giving people a new way of choosing which products they want to see developed. Its also a new way to fund projects from thousands of people who simply want to see ideas come to life. Worldwide crowdfunding is collecting over 250 million US dollars per year. It brought to the world projects like Pebble Watch, UAE's Infenitec, and over 10% of Sundance movies this year were produced through Crowdfunding. We will also see the future of videogames through crowdfunding in the form of the virtual reality device “Oculus Rift” and the budget open game console “OUYA”. Here is a chance for Arabs to choose and shape the future too Zoomaal crowdfunding platform allows inventors and creatives of Arabia to showcase their projects and raise funds from individuals. Users on the site can pledge as little as $5 each. With many people wanting a project and pledging, the money to get the project up and running won't be a problem. Zoomaal will focus mainly on Arabia and will offer a donation-based model where projects will have to offer gifts to their donors, not to be confused with crowdsourced equity investment. Zoomaal focuses on projects, rather than startups looking for funding. As there are many students and entrepreneurs that do not necessarily have business and entrepreneurial skills that attract investors and sponsors, but rather a great idea or project that many need and are willing to support. To view Zoomaal's website, visit the link: www.zoomaal.com “Zoomaal is not a clone of Kickstarter or Indiegogo, but rather a platform that aims to support and grow the creative culture in the Middle East. Zoomaal connects the creative Arab youth with supporters around the world, in Arabia and expatriates in the US, UK, and Canada”, Abdallah Absi says, CEO of Zoomaal. "We are excited to be working together with other investors in the region and founder Abdullah Absi to bring crowdfunding to Arabia. Our region has a long history of nurturing inventions and discoveries. Zoomaal is not just about funding projects, but it is a platform that will allow people all over to support inventions and discoveries - giving them a practical way to grow this culture of innovation.", Rashid AlBallaa says, CEO of N2V. More about N2V: N2V is one of the largest Internet holding groups in Arabia, focused on value creation through building and investing in Arabic consumer web & mobile ventures (e-commerce, Arabic content, social media, games, mobile apps), with over 200 employees spread in offices around different Arab countries (Saudi, UAE, Jordan, Egypt, Bahrain) and the USA. More about Abdallah Absi: Abdallah Absi is a young serial and social entrepreneur that aims at raising new generations of Arab entrepreneurs. He is the CEO of Zoomaal and the President of the Entrepreneurship Club NGO in Lebanon. Abdallah has won various awards in entrepreneurship and computer science. You can add him on LinkedIn: http://lb.linkedin.com/in/abdabsi 5

MIT Enterprise Forum Arab Startup Competition - 3 Tracks

http://www.mitefarab.org/2013/10/mit-enterprise-forum-arab-startup-competition/ The MIT Enterprise Forum Pan Arab has a proven record in promoting MIT-style entrepreneurship by organizing each year the MIT Enterprise Forum Arab Startup Competition, in partnership with Abdul Latif Jameel Community Initiatives, targeting 21 countries of the Arab region and bringing in more than 4,000 applications a year. The competition has trained over 900 entrepreneurs and has helped start more than 200 knowledge-based and technology-driven companies in Yemen, Jordan, Lebanon, Saudi Arabia, UAE, Tunisia and others. The website is now open for applicants. Do you have a new business idea, a startup or a growing company that you want to take to the next level? Apply now: www.mitarabcompetition.com IDEAS Track For entrepreneurs with just ideas looking to take them to the next level See the questions for the Ideas Track here. Eligibility Criteria for the Ideas track You can apply as an individual or part of a team provided that at least one member is an Arab national The business idea should be implemented in one of the Arab world countries Your idea can be in any sector (Creative industries, Construction/Engineering/ Education/ Environment/Food and Agro Business/Health and Healthcare/Entertainment/ICT/Services, etc.) No registration; No prototype; No funding; No sales The new Rolling Application System Website opens on October 28th and closes by the time the 50 semi-finalist teams are selected You are strongly encouraged to apply REAL EARLY to make the most out of the rolling process A higher chance to get selected if you apply early We are looking for a total of 50 semi-finalists for the ideas and startups tracks, so these slots get filled up quickly as we judge and qualify applicants especially that the judges evaluate applications as they come in, instead of waiting to review all applications concurrently A Second Chance to Apply: With a rolling process, applications will be reviewed as soon as they are submitted. You are likely to hear back from us within 3 weeks (instead of the usual 3 months from previous years), giving you another chance to adjust your entries and reapply. Grading Round 1 Judges evaluate applications as they come in Each application will be reviewed by 3 judges based on innovation, scalability, and positive social impact. Applications receiving an average grade above 70/100 shall qualify to the next round Selection Criteria Innovation: Creativity and improvement of existing solutions and/or business processes with respect to current competitors or comparables. Within this definition, innovation does not necessarily mean technology. Scalability: A business idea should not be limited to a local market. At a minimum, a nationwide market should be targeted. Preferably, the business could easily be replicated regionally or globally as the company expands. Impact: This innovative business idea has the potential to become a landmark company in the region and make an impact on the region’s economy or perceived competitiveness. Semi-finalists will be automatically assigned a local coach to work closely with them in view of achieving the deliverables set for each track prior to attending the 3-day workshop. Deliverables for the Ideas Track Developing a working prototype Securing at least one client Forming a team and selecting board of advisors Submitting an executive summary Workshop: March 2014 Following ~4 months of preparations and working toward achieving common deliverables, the 50 semi-finalists of the Ideas & Startups tracks will sit for a 3-day training covering topics such as business planning, sales, finance, marketing, elevator pitching, presentation skills, etc. Finalist Teams At the workshop, Round 2 judges will choose out the finalists teams from the Ideas & Startups Tracks 50 semi-finalists and qualify them for the final round of oral presentations Final Round Oral Presentations: March 2014 On day 3 of the workshop, the participants from the ideas and startups tracks will have to pitch in front of a judging panel. Names of the Final Jury members will be announced in due time. Final Award Ceremony The winning teams are then announced during a Final Award Ceremony on March 27th, 2014 —————————————————————————————————————- STARTUPS Track For startups with a working prototype, ideally with some user traction and some sales See the questions for the Startups Track here. Eligibility Criteria for the Startups track At least three team members (at least one of the members should be Arab national) The startup should be registered in one of the Arab world countries Your idea can be in any sector (Creative industries, Construction/Engineering/ Education/ Environment/Food and Agro Business/Health and Healthcare/Entertainment/ICT/Services, etc.) Working Prototype ready, ideally with some user traction and some sales The new Rolling Application System Website opens on October 28th and closes by the time the 50 semi-finalist teams from the Ideas & Startups tracks are selected You are strongly encouraged to apply REAL EARLY to make the most out of the rolling process A higher chance to get selected if you apply early We are looking for a total of 50 semi-finalists for the ideas and startups tracks, so these slots get filled up quickly as we judge and qualify applicants especially that the judges evaluate applications as they come in, instead of waiting to review all applications concurrently A Second Chance to Apply: With a rolling process, applications will be reviewed as soon as they are submitted. You are likely to hear back from us within 3 weeks (instead of the usual 3 months from previous years), giving you another chance to adjust your entries and reapply. Grading Round 1 Judges evaluate applications as they come in Each application will be reviewed by 3 judges based on innovation, scalability, and positive social impact. Applications receiving an average grade above 70/100 shall qualify to the next round Semi-finalists will be automatically assigned a local coach to work closely with them in view of achieving the following deliverables set for each track prior to attending the 3-day workshop Selection Criteria Innovation: Creativity and improvement of existing solutions and/or business processes with respect to current competitors or comparables. Within this definition, innovation does not necessarily mean technology. Scalability: A business idea should not be limited to a local market. At a minimum, a nationwide market should be targeted. Preferably, the business could easily be replicated regionally or globally as the company expands. Impact: This innovative business idea has the potential to become a landmark company in the region and make an impact on the region’s economy or perceived competitiveness. Deliverables for the Startups Track Deliverables of the IDEAS track should all be met, plus Submitting a 10-15 page business plan Getting ready to pitch for VCs Workshop: March 2014 Following ~4 months of preparations and working toward achieving common deliverables, the 50 semi-finalists of the Ideas & Startups tracks will sit for a 3-day training covering topics such as business planning, sales, finance, marketing, elevator pitching, presentation skills, etc. Finalist Teams At the workshop, Round 2 judges will choose out the finalist teams from the Ideas & Startups Tracks 50 semi-finalists and qualify them for the final round of oral presentations Final Round Oral Presentations: March 2014 On day 3 of the workshop, the participants from the ideas and startups tracks will have to pitch in front of a judging panel. Names of the Final Jury members will be announced in due time. Final Award Ceremony The winning teams are then announced during a Final Award Ceremony at the end of Day 3. ——————————————————————————————————————— Global Track For established companies seeking Silicon Valley exposure and funding from international VCs See the questions for the Global Track here. Eligibility Criteria for the Global track At least 3 out of the 4 below requirements MUST be met: 1. Legally registered company, ideally with 2 years in operations. 2. Raised at least one round of funding (through an accredited Angel Investor or a VC firm) 3. Has global reach or presence. 4. Generates at least $500K/year in revenues. Mandatory: Provide a recommendation letter from one of our trusted partners: Abdul Latif Jameel Community Initiatives,Techwadi, Wamda, Flat6Labs, Endeavor, and Oasis500. Selection Process Submitted applications will be screened; the shortlisted candidates will be interviewed. 30 Finalists will be selected from the region and will be granted the opportunity to go on a 3-day Silicon Valley conference and roadshow during April 2014. Silicon Valley Conference and Roadshow, April 2014 Day One: Workshop with top entrepreneurs Discussing the latest insights and trends in the tech and digital worlds with industry leaders Hands-on training on key topics; scaling operations across regions, sales, hiring new staff, in-bound marketing, fundraising, etc. One-to-one coaching sessions with experts in their fields Day Two: Touring Key Locations: Google HQ office tour, Facebook Campus, Apple and Airbnb offices. Visiting other entrepreneurship hubs: hacker and coworking spaces, tech shops, 500 startups, TechStars and meeting up with key people there. Day Three: Speed dating with: a)Top VCs b) A-Level Mentors Conference followed by pitching event and dinner.

the MIT Enterprise Forum of the Pan Arab Region

Founded in 2005, the MIT Enterprise Forum of the Pan Arab Region is one of the 28 worldwide chapters of the MIT Enterprise Forum Global, an avid promoter of entrepreneurship and innovation worldwide. The MIT Enterprise Forum- Pan Arab has a proven record in promoting MIT-style entrepreneurship by organizing each year the MIT Enterprise Forum Arab Startup Competition (www.mitarabcompetition.com), in partnership with Abdul Latif Jameel Community Initiatives, targeting 21 countries of the Arab region, bringing in more than 5,000 applications a year and engaging entrepreneurs in mentorship and networking.