Written by Aya Sadder - Expecting to grow to 8,000 people in 2017, Ray Dargham – Founder of STEP Group, announced as he welcomed 4,000+ through the doors at Dubai International Marine Club this April. With the wave of startups, speakers, incubators, angels and VC’s exhibiting at STEP, the crowd seemed to want more. It’s a good thing there’s still 2017.
While most of the startups have come to exhibit their hard work over the course of weeks, months and some even a few years, and yet expectations are as high as the cost of the tickets and every minute echoes the sound of excitement, mixed with fear, sweat and competition. Albeit all of this, there was still one big discussion that was on the tongue of all the startups: the need for funding. VC’s like LEAP Ventures & MEVP among others took to the stage pieces of advice that would help startups remain successful in a highly condensed market like the UAE. Tena Pick, Head of Advisory at VentureFin, stated that “a good business idea comes from a desire to change the status quo as opposed to starting a business as a means to gain purely financial profit.” Among the startups at STEP this year, I have listed a few below that are bringing that innovation and creativity to the table.
“If past history was all there was to the game, the richest people would be librarians.” – Warren Buffet.
Entrepreneur Middle East‘s Editor-in-chief, Fida Chaaban, moderated the opening panel at STEP 2016 to begin the discussion around the investment opportunities that are investable and why? Ms. Hala Fadel, Co-Founder at LEAP Ventures, responded with figures: “we should be investing at least 0.3% of the overall GDP capital injected into the UAE economy which is about 1.2 billion USD in funding.” Although she is correct to look at global best practices that have played out successfully; in this region, if we are to do it correctly, we need to have the right infrastructure in place that allows for more failures and testing in the marketplace before we can drop in a much more serious amount of capital. We need a lot more funding support from the government in STEM & Fintech as the future shines bright for these industries.
Here are some of the startups that are moving the needle forward in the technology space in the MENA region:
1) Vybz: The latest and greatest in the entertainment technology space right now. Vybz is a musical social network bridging the gap between established artists, up & coming musicians and fans.
2) Justmop.com: Need a shiny place in a fancy city like Dubai, Abu Dhabi, or Doha? Justmop gets the job done. They are an online on-demand marketplace for booking cleaners to help you keep your most precious resource, your time.
3) IRIS Solutions: One of the most innovative and latest technology solutions to autism. The Sensory Box created by IRIS Solutions is a cutting-edge & affordable approach to create a rehabilitation-friendly and safe environment – mostly but not only – for households with children who are affected by developmental disorders.
4) Bridg: On a mission to spread Fintech to masses and let people know they hear them when it comes to the pain of dealing with their banks.
5) Magnitt: A portal that helps and supports startups from concept exploration to launch and growth. All you have to do is join their platform to connect with Investors, Mentors and Potential Partners!
6) Gruptrip: No more forgetting who owes what, forgetting to share the photos, worrying what the itinerary is going to look like. With Gruptrip, everybody gets to see what’s going on through a click of a button. Available both on the app store and play store.
7) Higher Education: Education is the backbone of a society. And Higher Education provides a one stop destination to find out about all universities, colleges, higher education service providers and courses on offer in the United Arab Emirates.
Written by Aya Sadder
Adopting the principle that nine out of ten startups fail after three years of operations, it is essential to have an advisory arm in place that minimises risk and maximises the potential to succeed; for credibility to investors and as a benefit to entrepreneurs. If the business is going to fail, an advisory arm can help pivot to avoid that, and learn quickly from the mistakes that doom 90% of startups. Team dynamics, board-building, planning operations, marketing the business and finding more talent can be a huge burden on startups and are crucial to be resolved early on as the company is trying to grow. As we enter an era that is progressively entrepreneurial, with alternative funding mechanisms being in high demand, crowd-investing with an advisory arm will be one of the best solutions. The Economist released a report earlier this year stating a “320% increase in funding in Asia, with $3.4 billion raised, propelling the continent past Europe to become the second-largest crowd funding region.” (The Economist, April 4, 2015) With that growth in mind, do social businesses stand a chance? Mohamed Yunus popularly defines social businesses as “a cause-driven business” with expectations that the investors/owners can gradually recoup the money invested, but cannot take any dividend beyond that point.” In the context of yield, how can social businesses then become investable, and how many investors out there are willing to participate without any financial gain? This type of social enterprise does exist. Let’s have a look at companies like Aspirefg, who continue to scale their business, re-invest their profits and continue to operate with by constantly innovating their product and accessing new markets. Their mission is to “provide economically challenged, malnourished populations with high protein and micronutrient-rich food solutions derived from the supply and development of insects and insect-based products”. As a company operating with a brand philosophy to make a change, they are still able to operate as a profitable social business by diversifying their value proposition. With the advisory of the 2013 Hult Prize, this winning team not only became successful, but integrated their activities and business plan into the local communities. Potentially, the next step for these winners is to crowd-invest to genuinely validate the community’s support. In this social business’ scenario, stakeholders who are end-users have a great opportunity to become shareholders as well, ensuring everyone benefits in the end. We validated this further by interviewing the winner of the Middle East Dubai Acumen Social Business Plan 2013 Competition and founder of Green truck, Mr. Diya Khalil, mentioned that “after winning he never considered crowd-investing because he wanted there to be a marriage in the vision of his company with the investor who chose to be a part of his impact… but heard time and time again feedback from his customers that the whole community should be pitching in to his business to make sure it thrives.” (August 30, 2015) Crowd investing is the way forward for social businesses that want to grow and impact communities at large in a sustainable way with the help and support of advisors to direct and nurture the building blocks that will turn that dream into a reality. Thus, to Yunus’ definition of social business, if we add scalability and revenue generation foundations into their business models early on, adopting a profitable status for these companies will make them more investable and will ensure a high return, both socially and financially; for it is the community who benefits in the end. The most important aspects for a social business to be profitable is scale and replicability under different cultural, economic and demographic settings. The best way to reach that scale is getting large communities across the globe to be stakeholders in the truest form. References: http://www.muhammadyunus.org/index.php/social-business/social-business http://www.forbes.com/2010/06/15/forbes-india-muhammad-yunus-social-business-opinions-ideas-10-yunus.html http://www.entrepreneur.com/article/235378 http://www.ifc.org/wps/wcm/connect/topics_ext_content/ifc_external_corporate_site/gender+at+ifc http://www.economist.com/news/economic-and-financial-indicators/21647603-global-crowdfunding http://www.aspirefg.com/