Dubai may be well known for its homegrown startups, but there is now a push to make the emirate an attractive base for global startups looking to scale up internationally. It was with this goal in mind that 1776 opened for business in the Dubai Future Accelerators last October.
1776 was formed in 2013 in Washington DC by Donna Harris and Evan Burfield. Both were veterans of a government programme called Startup America designed to boost entrepreneurship outside Silicon Valley.
They formed 1776 to create an ecosystem that would tackle pressing challenges in areas such as healthcare, education, transport and energy. Their focus is not on creating the next dot-com, but on fostering innovation in highly regulated industries where it can be very difficult to innovate and scale up.
1776 describes itself as a global innovation platform, connecting startups, mentors and institutions. It offers co-working spaces (in Dubai and thee US cities) and operates a seed fund, but the core of its offering is Union, a software platform that hosts a range of resources of value to startups. By April, around 4000 startups across the world are expected to be using Union.
1776’s establishment in Dubai came about as a partnership with the government of Dubai, through its Dubai Future Foundation. Leading 1776 in the Middle East as managing director is Ned Jaroudi, a 20-year veteran of the regional ICT industry. Jaroudi says that 1776’s partnership with the government of Dubai has four key objectives.
One is to provide advice and counsel to the government of Dubai, particularly in the areas of policy and regulation and how that contributes to making Dubai a more startup-friendly city.
“We have a lot of experience with that in the US and we have this concept called ‘regulatory hacking’, which relates to how policymakers, startups and the private sector work together to break through regulations: either by waiving them, changing them or coming up with new ones to enable startups to thrive in a particular city,” he explains.
He cites the example of a company that 1776 worked with called Kidde. It makes carbon monoxide detectors for buildings, but needed a way to get these life-saving pieces of hardware into buildings. 1776 lobbied policymakers in the US to make the detectors mandatory in buildings.
“The idea is to work with policymakers to make it easy to have regulations that enable innovations to break through in a city because it’s actually going to benefit everybody within the city,” Jaroudi explains.
A second goal of the partnership, and a crucial one from Dubai’s perspective, is to bring the best international startups to Dubai, help them matchmake and network, and ultimately establish businesses in the emirate. “We provide a pipeline of startups for the Dubai Future Accelerators. We bring startups here through initiatives such as the DEWA Future Utility Cup and get them to work with institutions, to firmly establish Dubai as a global startup hub,” Jaroudi says.
When it is suggested that Dubai is already a startup hub, Jaroudi says that the 1776 partnership is about getting that message out to startups outside the region. “Dubai is a startup hub, but we’re trying to amplify the message and get it to resonate globally by doing these calls to action across all the startups we engage with across 70+ cities,” he says.
‘Intrapreneurship’ is the term that describes 1776’s third objective in Dubai. Dubai’s government is keen to develop a culture of innovation and entrepreneurship within its own departments and entities. “We have specific training programs for the institutions,” explains Jaroudi.
“We teach them about design thinking, about regulatory hacking, about startup methodology, all the things that change agents within those organisations need to really be successful on their innovation journey. We are hopefully kicking off the first intrapreneurship learning program in Dubai within months and then we’ll roll it out to the rest of the region.”
1776’s fourth regional goal is to help the UAE and MENA startup ecosystem to scale up globally. It is working with Middle Eastern incubators and accelerators to give them global exposure through the Union software platform. “We’re onboarding them to give them that global visibility to potential investors and customers, to give them a level playing field with the rest of the startups across the world,” says Jaroudi.
DEWA Future Utility Cup
Through its connections and its Union platform, 1776 has the potential to gather all the bits of the startup ecosystem together. This was demonstrated by its recent initiative with Dubai Electricity & Water Authority, the DEWA Future Utility Cup.
The competition was the result of a Memorandum of Understanding (MoU) signed between DEWA and 1776 to accelerate the pace of innovation in energy. The competition was modelled on 1776’s annual global Challenge Cup, which was won last year by MUrgency, a Dubai-based company that uses mobile technology to create a single global emergency response network. The DEWA Future Utility Cup tapped into 1776’s extensive network of nearly 4000 startups, many of which entered the 1776 Challenge Cup in 2015 and 2016.
When StartUp visisted the 1776 office in March, the five winners of that competition were in Dubai where they were being hosted at the 1776 campus in Emirates Towers and were either discussing, or already working on, proofs of concept with DEWA.
The companies are diverse in their offerings, with three of them coming from the Netherlands, one from the USA and one homegrown company started in the UAE. What all of them offer DEWA is a way to potentially reduce consumption and promote resource conservation.
Nowi, for example, is a Dutch company that makes sensors, something that will be essential in the smart cities of the future where almost every object can potentially be connected to the internet and its performance analysed. What is unique about Nowi’s offering is that its sensors do not need batteries and cables, instead taking all the energy they need to operate from the 4G and wi-fi signals all around us.
Simon van der Jagt, CEO & co-founder, was attracted to the Future Utility Cup because of Dubai’s stated ambition to be the worlds leading smart city. “To be that, you need a lot of sensors, but the problem of changing batteries every few months and running cables everywhere is very big,” he explains.
When Startup met der Jagt, he was exploring the business case for Nowi’s solution with DEWA and looking into a test deployment. “It’s going to be some sort of co-development,” he explained. “They may buy our sensors, but it has to be useful for them. Nobody just wants sensors, they want usable data that helps them do something. For that, we have to collaborate.
Test deployments are already underway in Thailand and the Netherlands, and the solution is set for a formal commercial launch at the end of the year. 1776, der Jagt says, has, “helped us to hit the ground running. Due to their network and their experience, they are a facilitator. The more we do here, the more likely it is we will be permanently based here.”
Another Dutch company and cup winner is Peeeks Power. Representing the company in Dubai were Kaz Vermeer and Hugo van der Heijden, who carry no job titles but are focusing on business development and scaling up the business.
Their company’s solution helps identify assets such as AC and freezer systems whose performance can be adjusted marginally without any impact on performance and functionality. The company describes its solution, which combines hardware, software and services, as ‘flexibility as a service’.
“We’re here for a month and we’re looking at the market, seeing what the status is, and we’ve found some ground to work with DEWA and do a proof of concept for our technology,” says Vermeer.
“We’re focusing on researching what kind of items could be subject to this proof of concept. Selecting the right asset is very important and doing that together with DEWA to make sure they can learn what is really important to them.”
Research is underway on what kind of assets would benefit from its solutions and what kind of efficiencies and savings could be realised. AC, one of the region’s biggest users of electricity, “would be interesting,” says Vermeet, “but you really have to understand how long you can fiddle with their power demand before comfort levels become an issue. Part of what we are doing right now is to define such goals.
The company entered the cup after hearing of it through a Dutch incubator that has links with 1776. “They know the market and the business culture here,” says van der Heijden. “They were able to give us an idea of how things work in Dubai, how people think about taking risks and the importance of doing proof of concepts here.
The company sees, “a big opportunity” in Dubai, especially with the need to balance peak demand more effectively and reduce overall electricity consumption. The company now has more than ten contracted customers in the Netherlands and is now keen to scale internationally.
For Peeeks Power and Nowi, winning the DEWA Future Utility Cup has given them the opportunity to explore international expansion. For Viafone, the one homegrown winner of the competition, winning offers an opportunity to interact more effectively with government departments and thus widen its potential customer base in its home market.
“We like the platform that 1776 offers in terms of mentors to help guide us through the sales process and branding process and connect us with different stakeholders,” says Souffiane Houti, founder & CEO. “What was of interest for us is their integration with the government institutions and work with the government to push innovative projects.”
Viafone started life in 2009 as a provider of loyalty and customer experience solutions. Although its technology proved itself, the company was tied into an exclusive agreement with a regional mall and felt it needed to broaden its customer base if it was to come out of the startup phase. Around two years ago, the company began to rewrite its technology so that it could start selling it to other clients and work was completed around August last year.
The company won the DEWA Future Utility Cup, in the Satisfaction & Loyalty section, just one month after joining 1776. Houti explains that the main challenge when entering was to devise a loyalty program for an organisation that operates as a monopoly.
“We thought it was a trick question when they mentioned how can you be loyal to DEWA as an exclusive utility,” he says. “We answered it by creating loyalty towards becoming more eco-friendly.”
The solution Viafone has proposed would award customers points based on DEWA’s four consumption slabs. Points could then be used to get offers and deals around Dubai. “It’s a very customer oriented solution that brings out the value in being eco-friendly,” explains Houti.
“It also gives the option of planting trees and buying eco-friendly devices through the application itself. You can go to different volunteering sessions through DEWA and earn points. The overall goal is for you to become an eco-friendly citizen of Dubai.”
Houti says the software for the customer loyalty solution, and a related employee satisfaction system is ready, and now needs to be populated with questions and analytics. It would roll out to DEWA employees first and then to end consumers. Working with 1776 has opened other doors and Viafone now has a chance of being selected to develop other government entities’ employee happiness programs.
After the success of the DEWA Future Utility Cup, 1776 is now running a Blockchain Challenge with the Smart Dubai Office. The competition started in February, runs through April and ends in May with pitches, prize money for winners and introductions to various institutions that can help startups develop their product offerings.
Companies incubated by 1776 have so far have raised more than $480 million in funding. Some of those companies have gone public, some have been acquired and some have raised further funding.
Jaroudi hopes that the companies featuring in the DEWA Future Utility Cup will, after successful pilot projects, establish operations in the region.
“There will be other opportunities, with Dubai as the hub for this region and the expanded region,” he says. “The leadership talks of Dubai as a hub for two billion people within four hours flying time. Given the infrastructure here, the connectivity and the drive for innovation, I think it’s a great place for startups to consider as a base for international expansion.”
“We at 1776 will help any startup that is interested in doing that by creating that connectivity, creating those connections and also by providing them here with a place to set up while they figure out what kind of permanent presence they want to maintain here.”
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