Finance an entrepreneurial ecosystem, says internet chief

Founder of Arabic email provider Maktoob and chairman of Jabbar Internet Group, Samih Toukan, has called on Governments and private businesses in the region to help build a new entrepreneurial ecosystem.

Speaking to Arabian Business StartUp, Toukan said attitudes need to change in order for start-up businesses and small and medium enterprises (SMEs) to flourish, arguing that more money must be channeled into this sector, and a support system established to offer advice and mentoring.

“There’s a lot of money here but it’s not going in the right direction,” he said. “Investments need to 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. There are lots of ideas and entrepreneurship, and the more we give them in financing and support, the more we can build an ecosystem.

“I would like to see more investment from private companies and governments towards entrepreneurship.”

Having founded Maktoob in 1998, exiting in 2009 when Yahoo! acquired the company in a deal worth about US$165m, Toukan set up Jabbar. Part of the company’s aims is to help e-businesses through investment and mentoring, pumping about US$100m into the sector last year alone - half the total investments, according to Toukan’s estimations.

“Last year about US$200m was invested. A lot of that came from venture capitalists in the US and Western Europe. That’s good because there’s interest from outside, but money in the region is not being put into this sector.

“The UAE relative to other Arabic countries is better but there’s still a long way to shift towards helping entrepreneurs. If we saw a shift of just one percent or five percent of money from oil or retail, then that’s a huge amount.

“The more financing we have, and more government support, the more businesses and entrepreneurship we will have. Look at the US – a large part of the economy there is from SMEs. Facebook, Yahoo, and the like all grew from people’s garages because they had the right support.

“Entrepreneurship represents a big hope for the region.”

Toukan added that young people in particular need to be encouraged to follow their passions, act upon their ideas, and start their own businesses. He believes the culture in the region doesn’t allow for failure, citing this as a major hurdle in fostering a creative and entrepreneurial environment.

“This region is full of youth, and they are all looking for ideas. They don’t want to just be in government jobs. The internet is a great tool that’s breaking borders and they can create products not just for this region, but for the rest of the world.

“Eventually the money will come but society has to change and allow people to have failures. We learn from failure and start another product or another company. It’s about building experience. We should be teaching that in homes and schools. We should support people who try and fail, and not condemn them.

“In the west they like people who have start-ups and fail because they have experience and can learn from it. That’s something that has to happen here.

“I would advise people not to worry about failure – to change their fear of failure. The chances of success the second or third time goes up in multiples. We have to teach young people to see it as experience not failure.”