11 Factors That Highlight The Maturing Of The MENA Entrepreneurial Ecosystem
By Soukaina Rachidi / Entrepreneur Middle East - Image Credit: Entrepreneur ME
SOURCE: Entrepreneur - 11 Factors That Highlight The Maturing Of The MENA Entrepreneurial Ecosystem
When I joined the entrepreneurial scene in the UAE in the summer of 2014, Entrepreneur Middle East had just started out in Dubai, and the conversation about the MENA region’s startup ecosystem, at the time, was in its nascent stages. Most of the coverage about entrepreneurship in the region was limited to sharing the origin stories of various startups and their unique selling points, which was, in itself, an indication of how the region’s entrepreneurial ecosystem was struggling to develop.
However, just three years down the line, a lot has changed. As Essa Al- Zaabi, Senior Vice President, Institutional Support Sector, at the Dubai Chamber of Commerce and Industry, said, in his address at Entrepreneur Middle East’s 2017 Enterprise Agility Forum, presented by du: “Dubai has become a leading hub for startups and entrepreneurs, who want to expand their footprint in the GCC, Middle East and North Africa.” He also noted how the UAE (and indeed, the wider MENA region) has also seen an increase in the number of funds, accelerators, competitions and training programs that cater to the startup and SME community.
Having said that, perhaps one of the biggest improvements that I’ve seen recently has been in the quality of the conversation that we’re having about entrepreneurship in the MENA region. Once upon a time, I think there was a genuine belief in the region that if we just copy-pasted different successful elements and mentalities from Western startup ecosystems (like Silicon Valley), then we would automatically create a successful ecosystem in the MENA region.
If only it were that easy- unfortunately, it’s not, and this was confirmed by the candid experiences that were shared by the speakers at the 2017 Enterprise Agility Forum. Throughout the various discussions at the event moderated by Aby Sam Thomas, Editor in Chief, Entrepreneur Middle East, and Fida Chaaban, Chief Communications Officer, KBW Investments, all of the speakers seemed to share a common theme when it came to their insights on the ecosystem: firstly, they were unconventional, secondly, they were nuanced, and, lastly, they were localized.
Not only do these three qualities indicate that our entrepreneurs (and ecosystem stakeholders) are becoming more experienced, it also demonstrates how they’re becoming more introspective. And perhaps, more importantly, it shows how our ecosystem is finally finding the confidence to develop, and begin to share its own body of entrepreneurial wisdom and knowledge, which is shaped by stakeholders from the region to empower a new generation of entrepreneurs in the region. Here are 11 points that prove the increasing maturity of the MENA region’s startup ecosystem.
1. We’re starting to understand that money isn’t the only important element of success
According to Hans Henrik Christensen, Director, Dubai Technology Entrepreneur Centre, “Out of 810 startups in [DTEC], only 2% manage to get VC money.” Lucy Chow, Director of Women’s Angel Investment Network (WAIN) added that there’s no doubt that “we need capital in the region.” This is true especially at the seed stage, since many entrepreneurs in the MENA region still struggle to secure investments in the early stages of their businesses. However, is funding (or having the access to funding) the only thing that guarantees success?
Not by a long shot. Anyone who is an entrepreneur knows that there’s much more to success than having money. While being able to receive investment from corporates, angel investors and VCs is an essential part to helping entrepreneurs grow and scale their startups, there are also other things that these stakeholders can give entrepreneurs that are just as valuable- if not more. For instance, when asked what corporates in particular could do to enable young entrepreneurs to become successful, Nabra Al Busaidi, Executive Director of Young Arab Leaders, said that “corporates should provide startups with the access to larger markets and industry-specific mentoring.”
Imagine if young entrepreneurs in the MENA region could have access to funding, their target market and the knowledge that they would need to unlock the full potential of their startups? They would be unstoppable. While it’s true that the MENA startup ecosystem has a long way to go as far as access to funding is concerned, it’s a sign of maturity that our ecosystem’s stakeholders are starting to understand that funding isn’t the only key to success. Now, they understand that funding is only one part of a comprehensive “success package,” which truly aims to activate the full potential of entrepreneurship in the region.
2. We’re decentralizing and democratizing the idea of organizational success
There used to be a time when the business scene was dominated by large companies and larger-than-life CEOs who supposedly embodied the idea of materialistic success, which so many of us were taught to pursue growing up. However, with the increasing rates of internet penetration and the decreasing costs of smart technology globally, young people (especially millennials) are no longer happy to accept the status quo. Many of them don’t feel happy or successful with what they currently do, because they feel that they should be able to do better with all the opportunities that the current age has to offer them.
In the MENA region, the youth also believe, like Hany Fahmy Aly, Executive Vice President – Enterprise Business at du, that the “world cannot be dominated by one or two global platforms,” and that “there’s a need for platforms that cater to the region.” Essentially, young people in the MENA are tired of feeling like unsuccessful outsiders in their own economic systems, and now they’re trying to change that. How, you ask? By trying to replace our society’s traditional idea of success with a more nuanced and equitable one that allows more companies and individuals to “win.”
Whether they’re using their coding skills to build apps, or their wallets to support companies that are sociallyconscious, young people are working hard to constructively acquire more of the “success pie.” Luckily, this socio-economic shift hasn’t gone unnoticed by the MENA region’s business ecosystem. In Fahmy Aly’s keynote address at the 2017 Enterprise Agility Forum, he demonstrated this shift by highlighting how important it is for startups to define their values, to uphold them, and further empower their team to be the best that they can be.
But what was truly powerful about Aly’s keynote address was the concluding remark: explore where all that can take you. This is an acknowledgement of the very simple fact that success is no longer linear. So, if we want more young people and startups to succeed in these unstable economic times, then our ecosystem has to continue “stabilizing” the idea of success by spreading the responsibilities, risks, and benefits to more stakeholders in our communities.
3. We’re trying to streamline the entrepreneurial experience and implement smart solutions
As I mentioned before, after several years of experience in the world of entrepreneurship, the MENA region’s startup stakeholders are already making some crucial realizations about our ecosystem. First of all, they’ve realized that having all of the ingredients to create a successful startup ecosystem is useless if the different stakeholders don’t communicate and collaborate with each other. That’s why initiatives like the Dubai Chamber-powered Dubai Startup Hub is important, because it’s a platform that brings together startups, investors, trainers, government entities, and development programs, enabling them to work together on removing the obstacles that inhibit the growth of the UAE startup ecosystem.
Ecosystem stakeholders have also realized that it’s not enough to introduce incentives for entrepreneurs to establish startups in the MENA region- now, they realize that the financial institutions in the region also need to be encouraged to play an active role in building up the region’s startup ecosystem. As Haytham Yousef Kamhiyah, CEO of Emirates Development Bank, said during the forum, “Banks, by definition, are risk averse, [so they] have to be incentivized to fund and support SMEs.”
But Ashraf Zeitoon, Founding Partner and Chief Ideation Officer at Diplomacy Labs, also noted that it’s not enough to tell banks that they need to invest in SMEs. “It’s [also] about providing infrastructure” for such frameworks that will give banks the confidence to invest further in this sector, because “given the increased regulation and the associated investment, banks are becoming more reluctant to open accounts for startups.”
Keeping all of that in mind, one thing become abundantly clear: if we want to unleash the full potential of the MENA region’s startup ecosystem, then we have to start focusing on incentivizing all of the stakeholders in the financial sector to get on the same page. And this means that we also need to invest in creating the right legal frameworks, which will help them work in the same literal and metaphoric spaces that entrepreneurs do.
4. We’re questioning the narratives and buzzwords that define our startup ecosystem
It’s no secret that many people in the MENA region’s startup ecosystem keep themselves tuned into the latest entrepreneurial buzzwords, and then pepper them into their professional bios whenever possible. Now, don’t get me wrong: I’m not saying that using certain buzzwords on occasion is bad, because we can’t deny that, for example, the Internet of Things is a new field that’s changing many industries and reimagining our relationship with the world, literally.
If you work in this field or you’re passionate about it, then it’s perfectly acceptable for you to use this term wherever possible. What’s not acceptable is when you mindlessly, unimaginatively, and repeatedly use such words to grab attention in a networking situation- or even in your LinkedIn profile. We get it, you can follow a hashtag, and you understand the basics of SEO. But what’s the point of being “found” on the internet if you lose all of your credibility in the process?
Thankfully, these days, there’s an increasing amount of skepticism about mainstream (usually Western) entrepreneurial narratives in the MENA region, and there’s a growing number of people who are becoming less inclined to blindly accept them. In fact, people like Sabah Al-Binali, an active investor and entrepreneurial leader in the MENA startup ecosystem, who knows exactly what it means to pitch, fund, grow and invest in the region, is speaking out against these popular narratives.
Why, you ask? Well, although these mainstream narratives are supposed to be motivational in nature, they might unknowingly be holding back our startup ecosystem by forcing entrepreneurs to feel that they have to conform to their, sometimes, inaccurate and culturally irrelevant assertions.
A perfect example of this is the idea of “passion.” While almost every motivational startup post on Instagram will tell you that being passionate is the be-all and end-all of entrepreneurship, Al-Binali believes that “if you’re passionate about something, you can’t make commercial decisions.” And that’s a problem that I’m sure that many entrepreneurs have faced when trying to take their entrepreneurial brain child to the next level.
So, then, the question becomes: what other mainstream narratives are restricting our ecosystem’s growth, and what are we doing to counteract them? It’s time that more people in the MENA startup ecosystem start questioning these narratives, so we can start finding better ones to motivate our entrepreneurs.
5. We’re trying to clearly articulate the expectations of the stakeholders in our ecosystem
As startups, angel investors, VCs, and governments in the MENA gain more experience in the realm of entrepreneurship, it seems that they’re still trying to refine what they want and expect as individual stakeholders in our ecosystem. However, I don’t think that the region’s startup ecosystem will be able to develop into a more mature, stronger one, until these stakeholders are able to share their unspoken desires and expectations with each other.
That being said, even when our startup stakeholders try to articulate their desires and expectations of each other, I don’t think they’re completely forthcoming. Therefore, a lot of time and energy is wasted in one stakeholder trying to figure out what the other really wants. While it can’t be denied that there’s a substantial learning curve for all of the stakeholders in the MENA region’s startup ecosystem, the only way that we can reduce this curve is by continuing to promote transparency as a key value in our entrepreneurial culture. During the 2017 Enterprise Agility Forum, WAIN’s Lucy Chow demonstrated this transparency when she explained how WAIN looks at startup founders first, and then expects them to research their angel investors to see if they can get some kind of mentorship or valuable knowledge from them, in addition to any potential funding.
Having said that, just because an angel investor or a VC, for example, shares a certain expectation or suggests a certain course of action it doesn’t mean that an entrepreneur has to follow it every time. As Rashid Sultan, angel investor and the founder of the Kuwait-based Savour Ventures, billed as the Middle East’s first food vertical accelerator, it’s important to “listen to your investors, even if you don’t necessarily take their advice,” because this dialogue allows you to understand what they’re thinking, and it also gives you an opportunity to articulate your own thoughts and goals. At the end of the day, our ecosystem’s stakeholders don’t always have to agree, but they must engage in more dialogue, so that they can co-create successful businesses together.
Source: entrepreneur.com