Young Arab entrepreneurs look to Silicon Valley for inspiration as the MENA region undergoes a digital transformation.
The start of the Arab Spring brought to the forefront many new realities of a region going through a major social and political transformation. The embracement of social media among the region’s youth has been one of the most popular topics covered in the media and addressed by the business community in recent years. What many have not uncovered is the rising number of young individuals who have felt empowered by recent trends to launch their own startups and businesses, a great deal of them technology or web-related that tap into market demands.
The MITEF Enterprise Forum recently held its awards ceremony in Dubai for its annual Arab Business Plan Competition, which recognises exceptional startups and business ideas throughout the region. The forum’s chair Hala Fadel says the key mission of the competition is to promote a culture of entrepreneurship in the region.
“You can start your business from anywhere, in Egypt or Palestine, it doesn’t matter where you’re located. We receive such a large number of applications from these places despite the situation there. The more we have people like this, the better the future of this region.” She added that overall interest in the competition itself has steadily increased since it was launched years ago. “We launched with 500 applications in 2005 and received 4,500 this year. So, we are achieving what we wanted to achieve which is inspiring people; the pool is wider the success stories will come.”
One interesting aspect surrounding the business ideas proposed by the finalists was that many of them are actually targeting consumers and users in markets outside of the MENA region. A few of the finalists have actually been pitching their products and ideas as far as Silicon Valley, and have plans to relocate to the US to push their startups to the next level.
Hind Hobeika, Founder of Butterfleye, a Lebanese startup, is one driven entrepreneur who has big plans ahead of her. After winning first place of the 2012 MITEF Arab Business Plan competition (worth USD 50,000), she says she is planning to use the prize money to
get her product manufactured, so that she can present it to target customers at an upcoming test panel, which would in turn, give her valuable feedback. Butterfleye is a creator of swimming goggles that are electronically enhanced to track a swimmer’s performance. The product includes a heart rate monitor that continuously and instantaneously tracks the heart rate of an athlete during the activity, and gives him a real-time visual feedback. Butterfleye allows swimmers to monitor their performance closely and track their progress over time.
Hobeika says her biggest challenge since starting up her business has been working on the actual physical product, as necessary materials and components for the product were not easy to find in the region. “I’ve had to reach out to external resources; my engineers are based in France, my designers are based in the UK and I’m prototyping in the US. This takes too much time and comes with a lot of costs, but the system is actually working, and I encourage other entrepreneurs in the region to do the same when developing their ideas,” says Hobeika.
Hobeika’s inspiration came from the fact that she herself is a swimmer and until now, there is no performance measurement tool on the market in this category. By developing something unique and practical, she has stood out among the crowd and has already generated a lot of support and interest abroad. The former CEO of Arena, who is the founder of the largest association for swimming in the US sits on Buttefleye’s board of directors.
The real challenge for Hobeika will now be to effectively market her product and get actual customers on board.“We’ve received amazing feedback so far, and I’m supported and pushed by so many people. We’re working as fast as we can to get a product into their hands so that we can have real feedback. Our goal is to sell the product and put it on the market. It’s the biggest swimming market and health awareness market so that’s where we want to sell first,” she says.
Vira is another finalist that has its eyes set on the world’s entrepreneurship capital. The team has already established relationships in Silicon Valley and has plans to move there to work on its concept further and finally apply for a patent for its product. The startup has developed a mobile application that acts as a personal assistant which uses artificial intelligence to help users reconnect with people from their past in an intuitive and practical way.
“The whole point of Vira is that it sits on top of all of your social networks, it brings all of your contacts together, organises them and analyses them to determine how important each person is to you,” says Tala Nsouli, Product Manager of Vira. There has been a few social platforms that have touched on this concept, but more in the way that LinkedIn provides relatively random suggestions to its users. “The differentiating factor is its intelligent nature, it gives you a context behind the suggestion, it suggests you reconnect with someone for a reason, it detects updates and gives you a context of why you want to reconnect and goes as far as suggesting what to say to them. It’s important not to flood the user, with notifications, it’s already too overwhelming, it would have about a few recommendations for day, it’s personalised,” says Nsouli.
Qabila Productions, the first runner-up of the competition, drew its inspiration from the Arab Spring, and specifically Egypt’s transformation during that time. The company’s business model is based on crowd-sourced media projects, which heavily rely on social media platforms like Facebook. Qabila, the Arabic word for tribe, has a message that resonates with the newly-empowered youth in that country: be your own voice.
“The greatest thing that we’ve succeed in is the philosophy behind Qabila. We make sure we bridge intellectual need of society
especially with Arab youth being critical with entertainment; we involve our fans from the ideation to the production. Qabila has created a unity spirit. A tribe style collective effort gets the message out,”says Perihan Abou-Zaid, Talent Management Director for Qabila. “We share our resources with our audience and sometimes they contribute ideas. Other times they contribute production.”
The company’s main revenue stream is production as it has been commissioned from governments and other companies to create unique crowd-sourced videos and content that serves a purpose. Their biggest project was national elections campaign for the government in Egypt, and the company is also currently working on similar projects in Libya. “We also have companies that want to speak to the youth, so they come to use instead of going through advertising agencies. Qabila also has a number of TV channels, and Qabila academy, a business-to-consumer service that trains individuals who want to become professional media producers.”
The Arabic e-content gap is a major topic of discussion among region’s media companies. The most recent Arab Media Outlook 2011-2015, published by Dubai Press Club highlights fast-changing consumer trends which have been shaped by both technology and recent developments in the region. Looking at the results of the survey, it’s clear why a young SME like Qabila would be garnering such a strong following. The survey points to the fact that traditional media in the Arab world have failed to effectively engage with their audience and readers, and these consumers in turn have largely tuned out, using mostly social media to get their news and communicate their ideas and opinions.
Acadox of Saudia Arabia, is another finalist that has capitalised on these trends to develop a cloud-based system that manages students’ academic and social activities. It’s program integrates various features similar to those found on BlackBoard and Facebook with an Arabised interface which manages student activity in all aspects including coursework academic progress, interactivity with other students and faculty. Currently focused on universities and colleges in the region, the company officially launched just this year and has already received independent subscriptions from 2,500 users from 104 universities in the region. Acadox has also signed two Saudi universities who will implement the platform on their campuses.
Mustafa Nablusi, the company’s CEO and co-founder, shared his story of starting Acadox with his colleagues, while still an undergrad at King Fahd University. During that time Mustafa and his team wanted an educational experience that helps them learn in the same way they interact with their world. Like many other students, they wouldn’t necessarily read instructions for a new gadget or tool, and would instead just turn it on and figure it out. They found traditional course tools “increasingly irrelevant” for today’s students. They also found out that the instructors are in need for new ways to engage their students classes through a learning environment that puts the students in control and in touch with each other.
After investigating their business idea further, they came up with the Acadox concept, but had to put it on hold due to their heavy course loads. However, as the need for such a product became more and more apparent to them, they decided that it was the right time to make the jump and go full-time with the business.“We dropped our PhD’s and decided that this was what we were going to do. We wanted to participate in the MITEF competition to bring our business to the next level. We realised that these problems are being faced by students everywhere, so we thought of creating an online platform that would really help these students. Once we became incubated as a result of being winners of the KAUST Seed Fund programme, we decided it was a golden opportunity to start.”
Nabulsi admitted that starting a business in a place like Saudi Arabia posed some challenges. First, the country’s startup culture is still developing, which made it difficult for Acadox to attract the right talent, while at the same time stay abreast of new web technologies surfacing. However, Nabulsi says things are slowly changing, as the country opens itself up to entrepreneurship opportunities.
“It used to be very hard to even share your thoughts and ideas about starting a business. Nowadays, this is changing and a lot of movements are being done to enhance the entrepreneurship eco-system. We noticed this in Saudi Arabia with several initiatives to support startup businesses,” says Nabulsi. There are still many challenges, especially in the tech startup field, but we are hoping to be part of the success stories that will change people’s mindsets regarding these type of ventures in the Middle East.”
In addition to MITEF, there has been a growing number of organisations dedicating to supporting and promoting entrepreneurship in the MENA region. TechWadi, is one non-profit organisation started by Arab-American professionals in Silicon Valley, to build bridges with the Arab world. The group aims to reach high-impact entrepreneurs in the region through conferences, networking events, workshops and mentorship programmes. SeedStartup in the UAE, is another key group that targets the digital entrepreneur with its competitive accelator programme and seed fund. Participants chosen for this programme receive direct funding and mentoring and are positioned on a fast-track to for future funding from venture capitalists and angel investors.
In the end, it’s competitions and organisations like these that are reaching many aspiring entrepreneurs who have no other form of
support. While organising the competition, Fadel says her team decided on a campaign that called on aspiring entrepreneurs in the region to Be the next Steve Jobs, or Bill Gates. She says that whilst there are a number of success stories that have come out of the region, the bar can and should be raised much higher.
“To some extent we already have some small Big Gates in the region. We have the founder of Zawya, the founder of Maktoob that was sold to Yahoo!, as well as Marka VIP that has just been funded, but at what point will these success stories reach a level that the average Arab would know about them? I think this would be the main question, to what extent will we be able to do this? This will no doubt take time, but for now we are focused on changing culture and promoting entrepreneurship. We are currently presenting at high number of universities in the region to get the word out.”