Source: Wamda Capital
When Linkedin’s first office in the Middle East opened it already had over six million users in the Arab world. Now it has over 100 staff and over 20 million are members in both Arabic and English.
Cofounder Reid Hoffman paid his first visit to the UAE for the World Government Summit in Dubai in February and he was excited by what he found.
CMS: This is your first visit to the UAE, what did you think?
RH: Between friends like you and Fadi Ghandour, and my Linkedin colleagues Fred Kofman and Ali Matar, I've been getting briefings from people with deep experience with the UAE, and encouragement to go there. Then, last year in Silicon Valley, I met Minister Mohammad Al Gergawi and started building a relationship with him too. So I had some knowledge about the region – but it's been extremely useful to actually come here and see all the entrepreneurial dynamism first-hand. I had high expectations, and Dubai has more than lived up to them.
CMS: How so?
RH: There is a cliché in the West that Dubai is “Las Vegas” without the casinos. But that completely misses the strategic vision and execution happening here. Obviously, the physical spectacle of the place impressive. But what I find most interesting is how the leaders here are clearly thinking in terms of how do you create an ecosystem that optimizes toward entrepreneurism and fast growth, and how do you make it a hub for attracting global talent? So it's a model not just for the Middle East, but really for emerging markets everywhere.
By opening up rule of law, by encouraging experimentation, by deliberately making Dubai a place where young people want to spend time and advance their careers, they're attracting some of the greatest thinkers and talent from across the region and the globe.
You and I had dinner with Fadi Ghandour and a dozen startups, and two – the ride share company Careem and ecommerce leader Souq.com – are becoming true scaleups. They and Bitoasis are offering Bitcoin access to the markets. Online book seller Jamalon and many others started elsewhere in the Middle East but have decided that they also want to be in Dubai.
I really enjoyed meeting the new Minister of Youth, Shamma bint Suhail Faris Al Mazrui, and the other young women and men she convened to share their thoughts on the region. Coming from the U.S., where our exposure to the Middle East is mostly filtered through very narrow lenses, it was great to get their perspectives. I don't think many people in the U.S. are aware of how much entrepreneurial activity and optimism there is among the young people here. I doubt many realize that one-third of the ministers in the UAE are women, or that Prime Minister Mohammed bin Rashid Al Maktoum hopes to make it 50 percent.
By the way, I really enjoyed seeing some of the cultural side. People were incredibly generous, and I learned a great deal about this history and culture over an Emirati meal in Abu Dhabi with Noura al Kaabi and visiting the majestic Sheikh Zayed Mosque.
CMS: I really dislike when people ask me “what is the Silicon Valley of X…” Silicon Valley is unique and while there are plenty of lessons to be learned, tech ecosystems will rise differently and there will be new opportunities to co-author innovation as real partners?
RH: I agree, but the lessons are important. As I said at the conference in my fireside chat with Fred, we build platforms in Silicon Valley. And I think it's always important for any growth-oriented government to keep that in mind, and particularly ones in emerging markets. What are the platforms you need to create that helps growing numbers of people and institutions productively interact? How do you build networks that help all different kinds of stakeholders to collaborate harmoniously and solve the problems that good governments and smoothly functioning societies are generally trying to solve.
For example, you need risk to produce growth, but the vast majority of governments tend to penalize risk and innovation – especially when technology is involved. But if you want big jumps in growth and productivity, you have to have risk. If there's no risk, then whatever you're doing is not different enough from whatever the status quo is to produce the big changes you want.
So regions and governments that want that dynamic growth should be ensuring risk through a portfolio approach. Instead of having one massive industrial strategy, invest in a number of things and assume some will not work. The ones that do work or show signs of working are the ones you double down on.
This kind of intelligent risk allows you create something seriously interesting, and ultimately success breeds success. Because once one of these strategies starts working, it will spin out a new generation of wealth and experienced entrepreneurs. And then they'll build out the next iteration of innovation and growth.
This, by the way, is why I have been so active a supporter of Endeavor Global and their co-founder Linda Rottenberg. They coined the term “high impact entrepreneurship” that captures this flywheel of success. In Silicon Valley, it's often described as the Pay Pal effect. People like Elon, Peter Thiel, Max Levchin, Chad Hurley, Steve Chen, Jeremy Stoppelman, and I who had our first big career successes at Paypal went on from there to build other fast-growing enterprises. And the process keeps repeating. People who started at Linkedin have gone on to create the next generation of startups. One day we’ll be talking here about the souq.com effect!
CMS: My experience is that sometimes the greatest thing holding back ecosystems are a cultural challenge – there just hasn’t been a lot of history embracing the failure that is natural in our ecosystems.
RH: Sure, but remember in Silicon Valley we don’t so much celebrate failure as much as we celebrate learning. Failure is a path to learning. The question I always ask an entrepreneur is what did she learn from what she failed at? Interestingly, for those who think an entrepreneur who has failed becomes a riskier person to bet on, the opposite is actually the case. If they learned from their failure, they are a better bet for the next investment. A dynamic entrepreneurial culture should celebrate learning and expect that bold bets sometimes result in failure. This can't just be a slogan. Investors have to incorporate this perspective into how they assess and support entrepreneurs. Governments should create rules and regulations that reflect this perspective.
CMS: What other lessons have you shared here?
RH: What make Silicon Valley unique is the intersection of technology and business – how it is essential to combine the two to create great scaled companies with transformative businesses. Silicon Valley is about scale-ups, not just startups. The conventional wisdom 20 years ago in the Valley was that if you had a risk-friendly culture, great technology, and sophisticated venture money to apply across stages, you could just put that all in a pot, stir it up, and mass companies would result. Well, that recipe is becoming progressively true in twenty places around the world, but Silicon Valley still dominates in creating huge, global outcomes because the network of Silicon Valley is about building scale quickly. Speed is essential. I was struck in my meetings here, by the way, with how many both in government and the startup community here appreciate this. It will be interesting to assess this five years from now and see who ended up executing.
CMS: You sound hopeful.
RH: I am.
CMS: Will you return to the Middle East?
RH: There's certainly more for me to learn here, so I hope to be back soon!
Source: Wamda Capital