Early on a Tuesday in August, entrepreneurs Jack Conner, Ryan Houck and Brandon Collins rehearsed pitches so they would be ready when the time came to secure funding from investors for their start-up idea. Instead of a room full of investors to listen, however, there was a video camera. And instead of a finalised product, the trio’s business is still a work in progress.
They, along with three other teams, are part of an accelerator programme in Dubai that gives funding and mentorship to turn an idea into a commercially viable business. While working on their start-up, they will film themselves giving pitches once a week and then work with mentors to improve. They are practicing for “Demo Day” in mid-September, when they will showcase a solid business that has traction and try to impress investors.
The trio, who have been friends for decades, flew in from the US to focus on developing Steadyfare.com, a website that lets travellers lock in their airfare price months in advance without worrying about price upswings. Houck, 27, who used to work in corporate finance pricing exotic securities in San Francisco, came up with the idea and decided to spend this summer developing it into a structured business with two other founders.
“We were messing around with this idea for a while and then we figured that getting into an accelerator is one of the easiest ways to focus on going from idea to launch,” said Conner, 28, over a coffee at Make Business Hub, a café for mobile workers that will serve as their office for three months. “Most have similar offerings of seed money and mentorship, but we picked this one because it’s in Dubai and we’d never been and our business is rooted in the travel industry.”
Following months of research, the founders of Steadyfare.com began the Seedstartup programme in June 2012. Seedstartup is one of a handful of new accelerators for startups in the region — such as Seeqnce in Beirut and Flat6labs in Cairo. The programme in Dubai provides up to $25,000 in seed capital for a business idea in exchange for a ten percent equity stake in the young companies. Top performers have the chance to pitch for a $250,000 investment after three months of developing the business.
“There are very few players in this part of the world that focus on early stage funding, which means that if you’re an entrepreneur trying to raise money, no one will touch you until you can prove your idea will generate revenue,” says Rony El Nashar, founder of Seedstartup. El Nashar worked as an engineer at a VC-funded startup in Silicon Valley before breaking into the field in the Middle East. In Abu Dhabi, he then served as the director of investments at the Khalifa Fund, which provides funding exclusively for new Emirati ventures, before launching global-focused Seedstartup.
“There are great ideas coming out of the region, but not enough people to fund them at the right stages,” he says. “If we want to see more start-ups succeed, we have to provide the right support.”
During the three months in training, entrepreneurs are exposed to three categories of mentors, including successful internet and mobile entrepreneurs, financiers and angel investors, and product experts who specialise in marketing or social media. Seedstartup is also a member of Techstars, a network of around 50 mentors, which include top executives of major internet companies across the world such as Zynga and Yahoo!.
This is only Seedstartup’s second year. The first batch started last September, when three teams were selected and two of them successfully received significant investor interest to grow their companies.
The businesses are very diverse. The first was a mobile application called Metwit, developed by two founders from Italy, that allows for social, user-generated weather reports. When weather updates are tagged on Instagram or Twitter, the user gets notified of a weather change happening just a few hours before it reaches the user.
The second two businesses received significant funding last year. One of them is a Tanzanian company called Rasello that capitalised on high mobile penetration rates in Africa by providing an SMS broadcasting service that connects 300 small business with over 100,000 interested subscribers. The young company eventually caught the interest of Esther Dyson, a prominent American angel investor, among others.
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