Entrepreneurs face the same key issues they did a decade ago
Almost eight years ago, I was involved in the development of Wamda, a website commissioned by Abraaj Capital to inspire and connect the region’s burgeoning start-up scene, which was taking root among enthusiastic youngsters in places like Lebanon, Jordan, Tunisia and the UAE.
Packed with case studies, profiles and video interviews, it was celebratory in tone and perhaps painted a picture of entrepreneurship as a career in itself; a way of working – laptops, coffee shops, hoodies, pizza – as opposed to a means of giving life to a business delivering a real-world product or service to plug a real-world gap in the market.
Indeed, in one of the planning meetings to discuss which new features could be added to the site, someone asked coolly, “If I’m running a business, I want information and advice. Where is all that?”
In retrospect, it seems an obvious insight. But it instantly cut through a lot of the froth and got to the heart of the issue: that entrepreneurship is difficult, usually complicated, invariably frustrating, and often pretty lonely.
What people starting and growing a business need isn’t a pat on the back but support – in all its various forms. All the motivational quotes in the world won’t help you create a workable business plan, effectively assess a supplier or navigate the region’s many regulatory frameworks. One entrepreneur I spoke to, for instance, had to smuggle a 3D printer into his country because it hadn’t yet passed a law to properly regulate them so simply banned them all.
Then, of course, there’s the key issue that all growing businesses face: money. In the past eight years, the ease with which an enterprise can find the funds to expand – whether for a new product line, opportunities in a new country, to exploit a new idea – is one challenge that remains a constant. In a 2016 UAE government survey, 45 percent of SME owners cited financing as one of the principal challenges, with fully half seeking financial help from friends and family.
The actual dollars in the bank is only just one part of funding, too. The other is what another entrepreneur described as “smart money”; the expertise, insight and guidance that can come with an angel or seed investment, usually because it is being provided by entrepreneurs themselves, people who understand what to spend that money on – and when.
Quite rightly, we like to herald our small-acorn-to-big-oak tales in this region. From Yusuff Ali founding Lulu Hypermarket decades ago, to Samih Toukan selling Matoob to Yahoo or Mudassir Sheikha unleashing disruptive ride-hailing app Careem, the notion that hard work and ambition can be amply rewarded resonates with us all.
But is the Middle East a place that provides the right eco-system – funding, talent, mentoring – for similar successes in the future?
The answer seems to be a combination of “almost” and “depends where”. Start-up funds are proliferating, from the Khalifa Fund for Enterprise Development, FinTech Hive and now Wamda – yes, the same one, only now with capital and Fadi Ghandour’s leadership – in the UAE, to Oasis 500 in Jordan, 9/10ths in Saudi and the region-wide FlatLabs. There are VCs like the ones we talk on page 24 and 32, plus mentorship programmes and co-working communities. There’s even a school, The Arcadia Preparatory School in Dubai, teaching entrepreneurship to children as young as six.
Equally, though, there are VCs who simply want a proven concept to take to market and exit. There are banks with no facilities to lend to start-ups. There are companies in small markets who need to commercialise in big ones. More can always be done to smooth the path.
One thing is demonstrably clear about the Middle East, though. As many hurdles as there might be in the path of a new venture, there are plenty of those young, tenacious people out there willing to take them on. And our magazine will continue to champion their stories.