Samih Toukan, founder of Maktoob and Al Jabbar Internet Group, sat down with StartUp to talk about the current entrepreneurial environment and what can be done to encourage more people to establish their own start-up businesses
When Samih Toukan launched Maktoob in 2000 he helped kick-start the region’s first e-boom.
The Arabic email provider was the first of its kind and gave the Middle East a new sense of belonging online, the importance of which led Yahoo! to acquire the company in 2009 in a deal worth about US$165m.
By that point the company had grown to offer a range of services, including chatting, greeting cards, electronic payments, auctions, a market place, games, a search engine, and more.
The deal was the jewel in the crown of the Middle East’s internet explosion which saw various other high profile deals take place including Thomson Reuters’ US$40m purchase of finance and business website Zawya, and a US$20m cash injection into online clothing marketplace Namshi from JP Morgan Chase and Blakeney Management.
Looking back, Toukan remembers the difficulties he faced as an e-entrepreneur, but also the conviction he had in making the business work.
“It seems a long time ago,” he says. “It was not an easy environment. I think it is much less difficult today, though of course there are still difficulties.
“The internet was really very new. It barely existed – user numbers were very low. People didn’t understand at this point what it was – it wasn’t part of day to day life.
“So it was a big challenge, even among family members. Maktoob was the first Arabic email. It expanded into other things but it started just as email. In 2000 it was before the internet bubble burst. At the time it was difficult to explain the business model, but we saw the long-term, and if the internet was going to spread in the region then the Arabic language was going to be an important factor.
“Financing at the time, however, was non-existent. We had to do it ourselves. We worked really hard and eventually got our first financing, but it was not easy for any start-up or entrepreneur.”
When Toukan parted ways with Maktoob he decided to set up a new company which would not only act as a parent company to various other websites – including those established by Maktoob which were not part of the Yahoo! deal – but also an investor in e-businesses, as well as mentor and advisor.
Al Jabbar Internet Group, based in Dubai Internet City, is now one of the region’s biggest in the sector, and in this new capacity Toukan has noticed some familiar problems.
He tells StartUp that more needs to be done by governments and private companies to help start-ups, small and medium sized enterprises (SMEs) and entrepreneurs to find their feet in the world of business, and create an entrepreneurial ecosystem.
“Financing is still a major issue,” he says. “It’s much better than before but it’s still very difficult. When Maktoob exited there was a lot of excitement for investors. It created hope for entrepreneurs to start their own businesses. Maktoob created a good thing, but that was more than three years ago now.
“There’s a lot of money here but it’s not going in the right direction. Investments need ot go elsewhere – not just real estate or to projects outside the region. The online sector, and entrepreneurship in general, is very important to the Arab world.
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