Exclusive Q&A with Ahmed AlJabreen, Venture Partner at 500 Startups

Following the announcement of Misk500's virtual Demo Day, MAGNiTT took the opportunity to reach out to Ahmed AlJabreen, Venture Partner at 500 Startups to delve into the impact of COVID-19 on the Misk500 accelerator program, the entrepreneurship ecosystem in KSA, his big-picture vision for the future, and more. 

Q1. Tell us briefly about the story of Misk500

The Misk500 Accelerator Program is 500 Startups’ global flagship program for the MENA region managed in collaboration with Misk Innovation. The program design is intended to have a flywheel effect, which means that not only would the founders who attended the training benefit, but that they would in turn train those founders and teams who were outside the program to benefit and grow. Thus, creating a virtuous cycle within the region. To date, we are very pleased with the results as both startups and investors have given great feedback about the program.

This is our third batch of companies to complete the curriculum for the program. The first cohort was launched in February 2019, the second batch was launched in August 2019 and the third was launched in February, this year. To date, we have successfully managed three batches and held two in-person, high-profile Demo Days with the third one coming up in an all-new exclusive digital format on 11th May 2020. It will truly be an interesting and exciting experience.

Q2. COVID-19 has impacted everything around us including the Misk500 program. Practically, how did it affect the program and the startups?

Adaptability and innovation are in our DNA, and we leveraged these strengths to manage the transition to teaching online and are working to create a true one-of-a-kind Demo Day experience.

We had launched Misk500 Batch 3 on 2 February and completed the first module, after which there was a short week’s break before the founders came back to attend the second module. It was soon after in early March, COVID-19 was declared as a pandemic and many countries were planning lockdowns to curtail its spread. We were scheduled to kick-start our second module. We quickly pivoted our strategy and decided to run the program remotely, as the health of our founders and mentors was of paramount importance.

Overnight the program was set up to remote mode. Thanks to Fadwa Kingsbury and Omar AlSubaie, the program managers, and the entire teaching team, for without them we could not have had such a smooth transition and continued the curriculum intensity. We made sure that, although this was a new experience both for the mentors and the founders, there was no compromise on the quality of the program. We continued the remaining modules online following a strict disciplined timetable. As per our original planned schedule with very few changes, we were able to complete the lectures, office hours, and even social activities successfully. 

Meanwhile, we began serious discussions on how to hold the Demo Day, which had to be organised online as the lockdowns were not likely to be lifted in time. The team went into overdrive and really stepped up to the plate to deliver an outstanding conclusion to the batch, from helping the founders in their pitch process to ensuring investors have plenty of ways to engage and learn about the startups. Nevertheless, it's been a very interesting and exciting experience.

One of the effects of the lockdown that we noticed early on, was the impact on the mental health and businesses of some of our startups. As the first measure to help and continue our support, motivate and encourage the mental health of our founders, the Falcons team swung into action to initiate and schedule remote sector-wise, founder therapy sessions over the past few weeks. These sessions proved to be very useful and insightful as founders tried to help, share ways they had adapted to the situation, and came up with ideas to support each other during these difficult times.

Q3. How will the Digital Demo Day actually work for investors, startups, and the general audience? How will investors be able to engage with the founders/startups? Are you prepared for any challenges?

Holding Digital Demo Day is a new concept and will be a different experience than the in-person event, for the investors and the startups alike. Fortunately, we have amazing teams at 500 and Misk who have been working diligently to ensure that we get all the elements right and have a well-structured plan to get there. The good thing, I should say, is that we were fortunate because our head office in San Francisco had to get up to speed to suddenly pivot and organize a Digital Demo Day towards the end of April.

In the midst of the lockdown, they were able to host a very successful inaugural digital event. This was a blessing for us. We are now working very hard and in close cooperation with the US team to put together an exciting and exclusive Digital Demo Day experience for both the founders and the wider entrepreneurial ecosystem. 

Q4. How do you think the entrepreneurship ecosystem in KSA is responding to COVID-19?

The entrepreneurial ecosystem in KSA is still nascent but has great potential. During the crisis, many of our startups have experienced growth in the number of users, especially in the F&B sector. With COVID-19 social distancing of primary importance, corporates are seeing the definite shift to digital transformation and know that this will continue to be the next norm. Those who were lagging behind are actively implementing digital strategies to keep up with the current situation. There’s a lot of great potential in tech transformation in KSA and we continue believing that all of this will turn to a positive turn for the future for our founders. 

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Q5. How has COVID-19 affected the current cohort of startups?

Overall, startups that require in-store purchases of products have been impacted the most. Despite the challenging times, most of the startups are already generating revenue and represent high-growth tech verticals in healthtech, fitness, recruiting, and e-commerce.

In terms of geography, this is a pandemic and as such it has affected all parts of the world negatively. The silver lining for startups is that it is relatively easier to hire good talent now. Many people have unfortunately been laid off due to economic difficulties and startups should be able to access a better and bigger pool of talents.      

Q6. Are there any specific industries in your cohort at the moment that are experiencing a spike in consumer demand?

Many have taken some serious measures to combat the crisis. ElCoach, for example, is a personalized fitness and nutrition app. Since gyms have been shut down, they have seen a spike in user numbers signing up on their app to continue their work out sessions. 

Q7. What is your big-picture vision for Misk500? Do you see Batch 4 happening in the near future / if so, when? And what will you be looking for in the next batch?

The aim of Misk500 is to support and accelerate the growth of innovative seed-stage companies in the MENA region. We believe that there’s talent and we want to bridge the gap and build more advanced startup ecosystems such as the one in Silicon Valley. We have a set of very dedicated and experienced global experts as mentors. Each one of them are entrepreneurs who have managed and run companies, with some having an exit under their belt. So they have been in the trenches and understand exactly what our founders are going through. 

We continue to believe that this program will have a great impact and will transform KSA in particular and the region in general, digitally as more and more new entrepreneurs with brilliant solutions spring up in the near future. We hope to announce some exciting news about future programs soon.  Watch this space!

Q8. Finally, what advice would you give founders right now?

There are a lot of opportunities today for highly innovative and skilled founders. The current times have clearly indicated that a new era of digital transformation is here to stay, and everyone has to up the game in order to stay alive. 

Consumers are increasingly looking for digital products and services, and that is great news to spur startups. However, startups should remain lean and not increase their burn rate without finding product-market-fit first. Besides, they should keep an eye out on changes in consumer behavior and adapt to that as soon as they can.

COVID-19 further suppressed the number of deals in MENA-based startups in April but total funding increased by 202% as EMPG joined MENA’s unicorn list by raising $150M from existing shareholders. Learn more details in MAGNiTT’s April 2020 Dashboard.