Document 2426788

AUTHOR:
Jamil Wyne, Wamda Research Lab
(jamil.wyne @wamda.com)
PARTNERS:
The Wamda Research Lab is Wamda’s research
program that produces studies on entrepreneurship in
the Middle East and North Africa (MENA) and seeks
to foster thought leadership in this field. Its agenda is
to inform investors, policymakers, and other stakeholders on the challenges faced by entrepreneurs in
the MENA region and the potential solutions for overcoming them.
Endeavor Insight is Endeavor’s research arm,
studies high-impact entrepreneurs and their
contribution to job creation and economic growth.
Along with the Kauffman Foundation and the
World Bank, Endeavor Insight is a founding member
of the Global Entrepreneurship Research Network
(GERN). Its research educates policy makers and
practitioners and helps them to accelerate
entrepreneurs’ success and the development of
entrepreneurship ecosystems around the world.
ACKNOWLEDGMENTS:
A large thanks is due to Rhett Morris, Mathilde Jais
and Mike Goodwin from the Endeavor Insight team.
They were instrumental in developing the framework
and methodology for this study and their guidance
throughout the project added great value. Additionally,
Fulbright Fellow Iliana Montauk was an integral member of the Wamda Research Lab during the creation
of this report and her research and editing contributions significantly enhanced its quality. We would also
like to thank the following individuals for their expertise
and guidance throughout the study’s development,
implementation and write-up:
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Walid Faza, Wamda
Reem Khouri, Aramex
Habib Haddad, Wamda
Nina Curley, Wamda
Amal Ghandour, Research & Communications Specialist
Mohammed Minawi, Ipsos Jordan
Hisham Kassim, Bellweather Data
Lina Shehadeh, Aramex
Ola Doudin, Aramex
Hala Hanna, World Economic Forum
Paul Dyer, Silatech
METHODOLOGY:
This study focuses on a specific cohort of
entrepreneurs in the Middle East and North Africa
(MENA): those with an ambition to scale their companies.
Although there is no official figure for the number of
entrepreneurs in the region who are looking to scale,
we assume that, based upon global figures, entrepreneurs
with the ambition to scale are rare in MENA.1
Our research is based on a survey of 937 entrepreneurs
and entrepreneurship experts (768 entrepreneurs
and 169 experts) throughout the MENA region.2 To
assess the barriers that entrepreneurs face when
attempting to scale, our primary survey questions
focused on four factors:
1.
2.
3.
4.
Generating revenue
Obtaining investment
Building a team
Expanding geographically
We determined that these four factors are key indicators
of growth, by conducting interviews with regional
entrepreneurs and experts and research on business
growth indicators. Our survey asked entrepreneurs
to select their top two challenges in each of the four
categories. Then, they were asked to specify which
of these four factors they found most challenging.
Experts were given the same questions and asked
to indicate which of the factors they thought were
most challenging for entrepreneurs.
We built our sample through a regional mapping of
institutions supporting entrepreneurs in the MENA
region, and through Wamda’s media arm and social
media communities. As this sampling method
introduces certain constraints to our data set, we
do not claim that our findings are representative of
all entrepreneurs in the MENA region. Additionally,
as our mapping is comprised heavily of institutions
and entrepreneurs from Jordan, Egypt, the United
Arab Emirates (UAE) and Lebanon, over half of our
sample comes from these four countries.
All respondents completed a self-administered online
questionnaire, which was circulated from February
24, 2013 through May 30, 2013. We also conducted
phone interviews with a subset of 111 individuals
from the entrepreneur and expert samples to add
qualitative insights to the survey findings.
1. See: Hurst and Pugsley, What do small businesses do?, Brookings Institution, 2011; and Erkko Autio, Global Entrepreneurship Monitor, Global Report on High-Growth Entrepreneurship, 2007
2. The experts represent venture capital firms, angel investment networks, incubators, accelerators, NGO’s, corporations and universities with specialized programs to support entrepreneurs.
P. 2
Table of Contents
4FOREWORD
6
EXECUTIVE SUMMARY
7INTRODUCTION
10
Figure 1: Rise in Entrepreneurial Support Organizations in MENA (1984-Present)
Figure 2: Where entrepreneurs seek to open new offices in next 1-2 years
Figure 3: Industry breakdown
Figure 4: Country Breakdown
Figure 5: Founders’ ages
Figure 6: Company ages
Figure 7: Number of founders per company
Figure 8: Male entrepreneurs vs. female entrepreneurs
Figure 9: Education levels of entrepreneurs
Figure 10: Resources accessed by entrepreneurs
11BARRIERS
13
14
15
16
Figure 11: Challenges to Scale: Entrepreneurs vs. Experts
Figure 12: High-level challenges: ICT vs. Non-ICT
Figure 13: High-level challenges to Scale: Country Breakdown
Figure 14: High-level challenges to scale: – Scaleups vs. Non-Scaleups
17
18
19
20
20
21
22
23
24
24
24
25
26
27
28
28
29
30
31
32
32
Generating revenues
Figure 15: Challenges to generating revenues – Entrepreneurs vs. Experts
Figure 16: Challenges to generating revenues – Scaleups vs. Non-Scaleups
Discussion Box 1
Case Study 1 - ShopGo
Obtaining investment
Figure 17: Challenges to obtaining investment – Entrepreneurs vs. Experts
Figure 18: Challenges to obtaining investment – Scaleups vs. Non-Scaleups
Discussion Box 2
Figure 19: Investments received in 2012
Case Study 2 - Diwanee
Building a team
Figure 20: Challenges to building a team – Entrepreneurs vs. Experts
Figure 21: Challenges to building a team – Scaleups vs. Non-Scaleups
Discussion Box 3
Case Study 3 - Kngine
Expanding into new markets
Figure 22: Challenges to expanding into markets – Entrepreneurs vs. Experts
Figure 23: Challenges to expanding into markets – Scaleups vs. Non-Scaleups
Discussion Box 4
Case Study 4 - Chifco
33CONCLUSION
35
Figure 24: Priority areas
APPENDICES
36
39
39
Appendix 1 – Acknowledgments
Appendix 2 – Examples of ecosystem institutions
Appendix 3 - Recommended reading
Wamda Research Lab – THE NEXT STEP: Breaking Barriers to Scale for MENA’s Entrepreneurs
P. 3
Foreword
It is stark clear that creating good jobs is one of the
biggest challenges facing the Middle East. And unless
we tackle joblessness with innovative solutions, it will
continue to afflict our societies, especially our youth,
for years to come.
Entrepreneurship is a powerful tool for creating economic
opportunities, generating wealth, expanding markets
and empowering citizens. In developed countries,
small and medium enterprises (SMEs) produce 60
to 70 percent of jobs. However, in the Middle East
& North Africa (MENA), SMEs, which constitute the
majority of enterprises, account for an average 30
percent of private sector employment and 4 to 16
percent of total employment.
J. Kalan
Our region is full of aspiring entrepreneurs who can
become agents of job creation; however, they still
encounter many barriers when growing their startups.
So if we want to get serious about our unemployment
problem, we must focus our efforts on understanding
the nature and source of these obstacles and work
hard for their elimination.
J. Kalan
In its first study, the Wamda Research Lab starts this
most important of conversations. The report looks
at the difficulties entrepreneurs confront in generating
revenue, raising capital, attracting talent, building
teams and facilitating expansion, all of which are
central to the scaling process. No institution or
sector can address these issues alone. All stakeholders
- government, investors, entrepreneurship institutions,
universities, civil society, large corporations and entrepreneurs - must be involved in crafting practical answers.
The Middle East is ready for innovation and disruption
and our entrepreneurs must be leading the change.
We have a long road ahead of us replete with hurdles
that could be turned into opportunities if we pool our
knowledge and contribute to our region’s developmental strategies.
J. Kalan
Fadi Ghandour
Chairman of Wamda
Wamda Research Lab – THE NEXT STEP: Breaking Barriers to Scale for MENA’s Entrepreneurs
J. Kalan
P. 4
Executive Summary
In the Middle East and North Africa (MENA), failed development policies have given way to
stifling unemployment levels, handicapping the region. With governments unable to absorb
the demand for jobs across the region private sector growth is of paramount importance in
job creation efforts. Entrepreneurs must play a lead role in generating employment opportunities,
and those that scale their companies can be leading agents in helping the region to overcome the unemployment hurdle.
To better understand the barriers to scaling, the Wamda Research Lab, in partnership with
Endeavor, conducted a survey of over 900 entrepreneurs and entrepreneurship experts in
the MENA region.
Key findings:
Indications of growth: All entrepreneurs in our sample are seeking to grow their companies and many others have already begun to scale their companies:
Most (72%) plan to open new offices in the next 1-2 years, many of which will be in the Gulf.3
Of those companies that have 3-year compound annual employment growth rates, over
70% have added jobs.
Fifty percent of these entrepreneurs’ companies demonstrate employee growth of at least
20%, which we refer to as “scaleups”.
Barriers to growth: These companies could be catalysts for widespread job creation. However, in a Wamda Research Lab survey of regional entrepreneurship experts, 60% said that scaling was the most challenging development phase for entrepreneurs in the
MENA region. We discuss the barriers to scaling within the following four areas:
1. Generating revenue - A lack of marketing talent, product adoption and payment collection limit revenue generation.
Entrepreneurs’ biggest challenge when generating revenue is marketing products and/or
services (41%), followed by finding customers (28%) and collecting payments on goods
or services sold (27%).
Experts agreed with entrepreneurs on all three factors.4
2. Obtaining investment - Minimal funding and a communication gap with
investors reduce entrepreneurs’ chances of securing investment.
Entrepreneurs (35%) and experts (43%) said that the lack of venture funding in their
countries is a barrier to obtaining investment.
3. Entrepreneurs seeking to scale were identified through our survey. In the survey we asked companies to indicate how they planned to scale their businesses and gave them the option to indicate that they did
not want to scale. Entrepreneurs that stated they did not want to scale their companies were removed from the data set for this study.
4. The experts represent venture capital firms, angel investment networks, incubators, accelerators, NGO’s, corporations and universities with specialized programs to support entrepreneurs.
P. 5
•
Experts also point to entrepreneurs’ inability to pitch ideas effectively (30%) and their lack of understanding of what investors were looking for (30%) as barriers to investment.
3. Building a team - Identifying, recruiting and retaining talent prevent
entrepreneurs from scaling their teams.
•
63% of entrepreneurs and 60% of experts state that finding talent is a barrier for building their team. Both groups also pointed to challenges with retaining talent and paying salaries.
4. Expanding into new countries - Difficulties in finding partners and legal
challenges limit market entry.
Finding partners to facilitate expansion was the most cited challenge by entrepreneurs
(47%) and experts (50%).
Entrepreneurs also pointed to the costs (39%) and the legal processes (28%) for setting up a business.
Conclusion:
In our sample, across growth rates, entrepreneurs often report similar challenges.
Additionally, entrepreneurs and experts often have similar opinions on where the main
challenges lies.
Lastly, it is important to note that, while globally enterprises point to access to capital as
a common growth challenge, the barriers to scaling identified in this report are not purely
financial and are in fact a mixture of financial, operational and regulatory hurdles. The
following are four priority areas for improving conditions for growth:
1. Increasing revenues: Improve marketing talent while also creating initiatives that target
market access and market education for both entrepreneurs and consumers.
2. Boosting investment: Increase the amount of available funding while encouraging knowledge sharing between entrepreneurs and investors.
3. Attracting talent: Strengthen regional education systems to enhance local talent pools, while improving retention and reward programs at startups.
4. Facilitating expansion: Reduce legal challenges and costs while helping entrepreneurs to identify strategic partners to facilitate expansion.
To achieve the maximum impact on job creation, the region’s entrepreneurship ecosystem
must reduce the barriers to scale for entrepreneurs. A multi-stakeholder approach is
needed across the ecosystem if these barriers are to be effectively addressed.
Wamda Research Lab – THE NEXT STEP: Breaking Barriers to Scale for MENA’s Entrepreneurs
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Introduction
The need for job creation is one of the most severe
challenges facing the Middle East and North Africa
(MENA). The region’s unemployment rate has hovered
at around 10%, which some view as a conservative
estimate that does not reflect underemployment or
employment in the informal economy.5 For youth
(aged 15-29), unemployment is even more prevalent,
as one in four young people in the MENA labor
market are without jobs.6 Traditionally, the region has
relied on the public sector to provide employment.
However, governments cannot absorb such high
demand for jobs, creating an urgent need for the
private sector to lead employment creation.7
Entrepreneurs are drivers of private sector growth
and can play a key role in combatting the region’s
unemployment. Small and medium-sized enterprises
(SMEs), which represent 80-90% of MENA’s formal
private sector, are being increasingly cited as a
solution for reversing unemployment trends.8
In parallel, an “entrepreneurship ecosystem” –
the network of institutions providing investment,
incubation, acceleration, training and other resources –
has developed to support the entrepreneurs across
the region.9
5. International Labour Organization, Global Employment Trends 2013.
6. Ibid. See also: World Economic Forum Global Agenda Councils -Youth Unemployment Visualization, 2013
7. Said, Ibrahim and Abdul, Joulan - Youth in the Middle East and the Job Market, Carnegie Endowment for International Peace, 2011
8. Nasr, Sahar; Pearce, Douglas. SMEs for job creation in the Arab world: SME access to financial services. The World Bank, 2012.
9. Additional resources could include access to markets and partners, legal advice and access to specialize experts.
P. 7
Figure 1:
Rise in Entrepreneurial Support Organizations in MENA (1984-Present) 10
160
Since 2008 there has been a sharp
increase in the number of institutions
140
supporting entrepreneurs in MENA.
120
Currently, there are over 140
organizations actively working with
100
entrepreneurs in the region.
80
60
40
20
0
1984-1989
1990-1995
1996-2001
Additionally, there are clear signs of company growth
throughout the sample. All entrepreneurs in our sample
are seeking to scale their startups. Sixty-seven
percent of surveyed companies are experiencing positive employment growth and 20% are scaleups, which, as noted, we define as companies with a
2008-2013
2002-2007
three-year compound annual employee growth rate of
over 20%.11 Additionally, over 70% plan to open new
offices in new countries, or deepen their presence in
current countries, in the next one to two years, many
of which plan to do so in the Gulf – 39% in the UAE
and 38% in Saudi Arabia.
Figure 2:
Where entrepreneurs want to open new offices in next 1-2 years
3%
Syria
10%
Lebanon
4%
Tunisia
6%
Morocco
4%
Algeria
4% 11%
Palestine Jordan
13%
Egypt
5%
Iraq
11%
Kuwait
Bahrain 5%
Qatar 23%
UAE 39%
38%
Saudi
Arabia
6%
Oman
Base: N=552
1%
Yemen
10. Figures are taken from a regional mapping of institutions supporting entrepreneurs in MENA. The mapping does not include microfinance institutions.
11. For the purposes of this report, a scaleup company is defined as a firm that is more than three years old with an average annual employment growth rate greater than or equal to 20% during the previous three years.
P. 8
J. Kalan
The ambition to scale – as well as the track record of
growth that many startups in our sample demonstrate –
is critical for job creation in the MENA region. As studies
have shown, scaling companies contribute the lion’s
share of jobs in most economies and play an indispensable
role in economic growth.12
However, scaling in MENA is difficult: in our survey of
entrepreneurship experts, roughly 60% say that scaling
is the most challenging development phase for entrepreneurs
in the region – more than starting, institutionalizing,
launching and exiting. Understanding the precise barriers
to scaling is instrumental in maximizing the potential for
MENA entrepreneurs to become key job creators.
12. For information on the impact of scaling companies please see Erkko Autio, Global Entrepreneurship Monitor, Global Report on High-Growth Entrepreneurship, 2007; Foster et. al., Global Entrepreneurship and Successful Growth Strategies of Early-Stage Companies, World Economic Forum, 2011; and the Organisation for Economic Co-operation and Development (OECD), High Growth
Enterprises, Chapter 8. Eurostat − OECD Manual on Business Demography Statistics, 2007.
P. 9
KEY FACTS ABOUT OUR SAMPLE OF ENTREPRENEURS:
Figure 3:
Industry breakdown (%)
Figure 4:
Country breakdown (%)
7%
7%
Morocco
15%
Tunisia
Lebanon
10% 18%
Palestine Jordan
15%
6%
Bahrain
7%
Egypt
16%
KSA
UAE
Base: N=768
Most entrepreneurs started their companies in their late twenties or
early thirties: The average age of surveyed entrepreneurs is 32.5
years and the majority (73%) of companies in the sample are four
years old or younger.
Figure 5:
Founders’ ages(%)
Figure 6:
Companies’ ages (%)
Base: N=768
Figure 7:
Number of founders per company (%)
Base: N=711
Thirty nine percent of companies have two founders; 33% have one
founder, 16% have three and 12% have four or more.
Base: N=768
Figure 8:
Base: N=768
Male entrepreneurs vs. female entrepreneurs (%)
Male entrepreneurs dominate the sample: Seventy percent of all
founders in our sample are male versus only 23% who are female.13
Eighty-seven percent of companies have at least one male founder
compared to only 38% who have at least one female founder.
Additionally, 62% of companies are run by only males compared to
13% with female-only founding teams.
77%
Figure 9:
Education levels of entrepreneurs (%)
The vast majority of our sample is educated: Forty-eight percent
have a Bachelor’s degree while 40% have an advanced degree.
Seventy-four percent of surveyed companies have founders who
have either studied or worked abroad.
Base: N=157514
Figure 10:
23%
Resources accessed by entrepreneurs (%)
Personal savings and support from family and friends are primary
sources of support: Nearly all (78%) entrepreneurs in the sample
have used their personal savings at least partially to finance their
companies. Additionally, nearly half (43%) have received support
from family or friends, while 24% have received support from an
angel investor.
Base: N=705
Base: N=710
13. These numbers are based on all founders represented in the survey, including both those who took the survey and their co-founders.
14. The base for this figure is 1575 because it takes into account all entrepreneurs represented by the 768 companies in the study, thus it includes co-founders.
P. 10
Barriers
Many of the startups in our sample are demonstrating strong growth and most
plan to open new offices to expand their reach in the coming years. Most importantly, all have the ambition to scale. This shared goal to grow
their companies makes these entrepreneurs critical to job creation efforts in
MENA. However across industries, countries and growth rates these companies face common challenges to scale.
“I’m not as worried about the starting up
process right now as I am about the
scaling process in the Middle East.”
– Samih Toukan
(Jabbar Internet Group, UAE)
Wamda Research Lab – THE NEXT STEP: Breaking Barriers to Scale for MENA’s Entrepreneurs
P. 11
B. Tabbah
Factors to scale
Revenue
Investment
Geography
Team
R. Alzayani
Wamda Research Lab – THE NEXT STEP: Breaking Barriers to Scale for MENA’s Entrepreneurs
P. 12
Figure 11:
High-level challenges - Entrepreneurs vs. Experts
Twenty-nine percent of entrepreneurs selected generating revenues as their top
barrier to scaling, followed by obtaining investment (24%). Experts responded
similarly with 37% citing generating revenues as a primary challenge for entrepreneurs, followed by obtaining investment (28%).
Base: Entrepreneurs (n=768) , Experts (n=169)
J. Kalan
Wamda Research Lab – THE NEXT STEP: Breaking Barriers to Scale for MENA’s Entrepreneurs
P. 13
Figure 12:
High-level challenges – ICT vs. Non-ICT
Generating revenues was also the largest concern at an industry level, cited
by 30% of ICT companies and 28% of non-ICT companies.
30
28
30
20
22
26
16
22
2
4
ICT
Non-ICT
Base:ICT (n=335) Non-ICT (n=425)
J. Kalan
Wamda Research Lab – THE NEXT STEP: Breaking Barriers to Scale for MENA’s Entrepreneurs
P. 14
Figure 13:
High-level challenges: Country Breakdown
In the four countries with the largest sample sizes, generating revenues was
the largest barrier to scale, with the exception of Jordan, where it was second
to obtaining investment.
36
27
26
31
30
30
21
16
19
19
26
29
11
23
21
22
4
1
6
2
Egypt
Jordan
UAE
Lebanon
Base: Egypt (n=117), Jordan (n=135), Lebanon (n=117), UAE (n=121)
J. Kalan
Wamda Research Lab – THE NEXT STEP: Breaking Barriers to Scale for MENA’s Entrepreneurs
P. 15
Figure 14:
High-level challenges – Scaleups vs. Non-Scaleups
For scaleups, building a team, obtaining investment and expanding into
new countries were each selected by 26% of the sample. For non-scaleups,
generating revenues was the most common challenge (32%), followed by
expanding into new countries (24%).15
26
21
26
21
26
24
20
32
Scaleups
Non-Scaleups
2
3
Base: Scaleups (N=165) vs. Non-scaleups (N=167)
J. Kalan
15. For more information on scaleups please see The 8-45 Report, Why Scaleup Companies are Critical for Job Creation in Colombia, Endeavor Insight, 2013.
P. 16
Barriers: Generating Revenues
Wamda Research Lab – THE NEXT STEP: Breaking Barriers to Scale for MENA’s Entrepreneurs
P. 17
I. Attar
Figure 15:
Challenges to generating revenues – Entrepreneurs vs. Experts
MARKETING IS THE BIGGEST BARRIER TO REVENUE GENERATION
Forty-two percent of entrepreneurs identified marketing products
and/or services as a challenge when it comes to generating
revenues, followed by finding customers (28%). Experts
agreed, pointing to marketing products and/or services (51%)
and finding customers (39%).
Marketing products/
services
42
51
Finding customers
28
39
Collecting payment on
goods/services sold
27
31
Developing new
products/services
21
22
Pricing products/
services
18
20
Competitors
13
7
Finding partners
11
11
Other
5
7
No challenges
3
2
Entrepreneurs
Experts
Base: Entrepreneurs (n=768) vs. Experts (n=169)
Wamda Research Lab – THE NEXT STEP: Breaking Barriers to Scale for MENA’s Entrepreneurs
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Figure 16:
Challenges to generating revenues - Scaleups vs. Non-Scaleups
SCALEUPS’ TOP OBSTACLE TO GENERATING REVENUES IS MARKETING
PRODUCTS AND SERVICES
Forty-percent of scaleups cited marketing my products and/
or services, followed by collecting payments (31%) as their
top difficulty. Non-scaleups agreed that marketing products and/
or services is a top challenge (43%) and also pointed to finding
customers (29%) and collecting payment on goods or services
sold (27%).
Marketing products/
services
40
43
Finding customers
26
29
Collecting payment on
goods/services sold
31
27
Developing new
products/services
22
21
Pricing products/
services
14
16
Competitors
17
18
Finding partners
9
19
Other
5
6
No challenges
4
2
Scaleups
Non-scaleups
Base: Scaleups (N=165) vs. Non-scaleups (N=167)
Wamda Research Lab – THE NEXT STEP: Breaking Barriers to Scale for MENA’s Entrepreneurs
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[BOX 1] DISCUSSION:
These challenges can take on multiple forms, which we
discussed in more detail with a subset of entrepreneurs and
experts from our sample.
“You have to customize your marketing strategy
for each country, which requires local
knowledge and expertise for each country.”
– Zafer Younis (The Online Project, Jordan)
“Because the market is not ready,
entrepreneurs take on the burden
of educating the market.
This is a challenge especially because
many entrepreneurs don’t have
enough training in selling ideas.”
– Samer El Sahn (Tahrir2, Egypt)
During follow-up interviews with entrepreneurs and experts,
both groups emphasized that entrepreneurs experience
difficulties understanding marketing strategies for the countries
they seek to enter, and challenges acquiring marketing talent
to execute their strategies. This is particularly critical when
navigating the small, fragmented markets that populate the
MENA region.
Additionally, as many entrepreneurs in our sample are working in ICT industries that are still maturing in MENA, product
adoption challenges persist. However, experts also relayed
that the market itself is not solely responsible for revenue
challenges. In particular, they discussed how entrepreneurs
need to determine proper market fit for their products and
services, an obligation that lies within the company rather
than in the market.
Case Study 1: ShopGo adjusts marketing strategy
to enable scale
When ShopGo first attempted to market directly to
merchants, it conducted extensive online searches for
potentially interested companies. However, clients were
often uncertain about the benefits of e-commerce or did
not feel comfortable selling their products online. Moe
Ghashim, the company’s founder and CEO, soon realized
that ShopGo’s marketing setbacks could be solved by
reassuring merchants that their merchandise would be
safe and that the process was transparent. To do so,
he and his company employed a new strategy wherein
it partnered with other key players in the e-commerce
field – PayPal, Aramex and Google – to create a consortium
that could collectively approach merchants to clarify
the e-commerce process and assuage concerns. The
consortium provided ShopGo’s clients with a sense of
trust and offered authoritative answers to any merchant’s
question. These experiences led Ghashim to simplify his
company’s marketing strategy and hone its expertise in
developing online stores. Ghashim says that a willingness
to test his product helped the company to identify precisely
what merchants wanted and to more effectively serve the
region’s e-commerce market.
Wamda Research Lab – THE NEXT STEP: Breaking Barriers to Scale for MENA’s Entrepreneurs
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Barriers: Obtaining Investment
Wamda Research Lab – THE NEXT STEP: Breaking Barriers to Scale for MENA’s Entrepreneurs
P. 21
I. Attar
Figure 17:
Challenges to obtaining investment - Entrepreneurs vs. Experts
A LIMITED SUPPLY OF FUNDING IS THE TOP CHALLENGE FOR OBTAINING INVESTMENT,
WHILE COMMUNICATION GAPS PERSIST BETWEEN ENTREPRENEURS AND EXPERTS
Entrepreneurs said that the supply of venture funding in their
countries was small (36%). The next most selected challenge
was investors not offering enough value beyond cash (24%),
followed by investors thinking that their business model was
risky (18%).
Experts agreed that the supply of venture funding was a pressing
challenge (43%), but also pointed to entrepreneurs’ lack of
understanding of what investors were looking for (31%) and
inability to pitch ideas effectively (30%) as challenges to
obtaining investments. These two answer choices were the least
selected by entrepreneurs (6% and 8%, respectively).
Supply of venture funding
in country is small
36
43
Investors not offering enough
value beyond cash
24
14
Investors think business model risky
18
24
Do not want to give up
equity
14
15
Knowing how much
funding I need
10
17
Understanding what
investors look for
8
31
Creating business plan
6
7
Pitching idea effectively
6
30
Other
8
7
No challenges
18
2
Entrepreneurs
Experts
Base: Entrepreneurs (n=768) vs. Experts (n=169)
Wamda Research Lab – THE NEXT STEP: Breaking Barriers to Scale for MENA’s Entrepreneurs
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Figure 18:
Challenges to obtaining investment - Scaleups vs. Non-Scaleups
ALTHOUGH THEY ARE SCALING AND MANY HAVE RECEIVED FUNDING,
MANY SCALEUPS BELIEVE THAT MORE FUNDING IS NEEDED IN THE MENA REGION
Thirty-two percent of scaleups and 34% of non-scaleups agreed
that the small supply of venture funding was a primary challenge
to obtaining investment. Investors not offering enough value
beyond cash was the second-most reported challenge by
scaleups (31%), followed by investors thinking their business
model is risky (17%).
Supply of venture funding
in country is small
32
34
Investors not offering
enough value beyond cash
31
21
Investors think business model risky
17
22
Do not want to give up
equity
15
17
Knowing how much
funding I need
10
8
Understanding what
investors look for
7
4
Creating business plan
6
8
Pitching idea effectively
6
9
Other
7
11
No challenges
21
16
Scaleups
Non scaleups
Base: Scaleups (N=165) vs. Non-scaleups (N=167)
Wamda Research Lab – THE NEXT STEP: Breaking Barriers to Scale for MENA’s Entrepreneurs
P. 23
[BOX 2] DISCUSSION:
In follow-up interviews, entrepreneurs and experts said that
while more funding was needed, larger funding sizes of USD
500,000 or more are a top priority. However, relatively few entrepreneurs in our sample had accessed funding at or above
this size.
Figure 19: Investments received in 2012
500K+
79%
1-499K
21%
Base: N=174
In parallel, improving communication between entrepreneurs
and experts is needed. While experts say that entrepreneurs
face challenges in communicating with investors, many entrepreneurs say that investors are not offering enough value
beyond cash.
“I think that many entrepreneurs don’t know
what investors want. We need more education between investors and entrepreneurs.”
- Dany Farha (BECO Capital, UAE)
To enhance investment prospects for entrepreneurs, new and
larger funding sources should be accompanied by the better,
more accessible education on the investment process.
Case Study 2: Diwanee navigates the MENA
funding landscape
Herve Cuviliez’s experience in starting and growing the
Lebanese digital media company Diwanee Media Group
offers insight into how a startup can engage investors
and attract capital. Cuviliez, along with three co-founders,
created Diwanee in 2009. Today, the company has 140
staff, which operate in three countries Lebanon, the UAE,
and Belgrade with plans to expand into Saudi Arabia and
Egypt soon. Currently, Diwanee is one of the region’s
leading online content hubs for women, which combines
written content with an e-commerce store. Seed funding
for the company came from a pool of angel investors
who invested progressively over a period of two years.
For its Series A round, Diwanee turned to Bank Med in
Lebanon, securing USD3.2 million from its investment
arm, Med Securities. Cuviliez explains that entrepreneurs
should not consider the process of finding investment
as a series of rounds, but as a continuous practice in
relationship building. A key trap that the company has
avoided is fundraising too close to the time when they
needed the capital. Starting the fundraising process too
late can lead to desperation, he says, or situations in
which a company considers taking funds from investors
whose approach differs largely from that of the company.
Cuviliez describes the process as “fundraising when you
don’t need to” an approach that empowers entrepreneurs
and puts them in a position to negotiate effectively.
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Barriers: Building A Team
Wamda Research Lab – THE NEXT STEP: Breaking Barriers to Scale for MENA’s Entrepreneurs
P. 25
I. Attar
Figure 20:
Challenges to building a team - Entrepreneurs vs. Experts
THE BIGGEST CHALLENGE TO BUILDING A TEAM IS FINDING TALENT
The majority (63%) of entrepreneurs in our sample state that finding
talent is their biggest challenge to building a team. Their second
most-cited challenge is paying salaries (35%), followed by retaining
talent (22%). Experts identified the same barriers citing finding
talent (62%), retaining talent (36%) and paying salaries (34%)
as the major issues they have observed.
Finding talent
63
62
Paying salaries
35
34
Retaining talent
22
36
Training employees
13
12
Building team
chemistry
12
15
Managing staff
11
19
Legal procedures
for hiring
7
5
Other
2
4
No challenges
4
1
Entrepreneurs
Experts
Base: Entrepreneurs (n=768) vs. Experts (n=169)
Wamda Research Lab – THE NEXT STEP: Breaking Barriers to Scale for MENA’s Entrepreneurs
P. 26
Figure 21:
Challenges to generating revenues – Entrepreneurs vs. Experts
ALTHOUGH THEY ARE GROWING THEIR TEAMS, NEARLY 3/4 OF SCALEUPS
STARTUPS REPORT CHALLENGES TO FINDING TALENT
Seventy-one percent of scaleups and 63% of non-scaleups cited
finding talent as a challenge. This was followed by 28% of scaleups,
who said retaining talent is a challenge, and 23% citing paying
salaries. Notably, 37% of non-scaleups report challenges with
paying salaries.
Finding talent
71
63
Retaining talent
28
20
Paying salaries
23
37
Training employees
16
11
Legal procedures
for hiring
10
8
Building team
chemistry
9
17
Managing staff
9
11
Other
1
1
No challenges
3
3
Scaleups
Non scaleups
Base: Scaleups (N=165) vs. Non-scaleups (N=167)
Wamda Research Lab – THE NEXT STEP: Breaking Barriers to Scale for MENA’s Entrepreneurs
P. 27
[BOX 3] DISCUSSION:
“Building a strong management team is
one of startups’ biggest challenges. Using
Employee stock options to attract talent is
still a new concept in our markets.”
– Ziad Mokhtar
(Ideavelopers, Egypt)
“Working with a startup is still seen as a
filler - people will work for a startup if
they think it would be a temporary
position that they could use to get a
better and more interesting job.”
– Hattan Ahmed
(Arabrooms.com, Saudi Arabia)
Being able to build good teams can hinge on the quality of
education systems and the caliber of talent entering the labor
market. However, follow-up conversations with entrepreneurs
and experts suggest that while education systems need to
improve in order to increase local talent pools, it is also
essential to entice talent to work for startups.
Paying salaries and retaining employees were two additional
challenges noted by both entrepreneurs and experts. Indeed,
offering stock options can help to retain employees, yet both
investors and entrepreneurs discussed how this practice is
nascent in MENA.
Furthermore, entrepreneurs said that even when talent is available,
most job seekers prefer to work for corporations, which are
more prestigious and less risky than startups. Enhancing
the quality of education regionally can help to build stronger
teams, but in parallel there must be stronger incentives for
working for startups.
Case Study 3: Kngine overcomes the talent gap
in Egypt
When Kngine’s CEO Haytham El Fadeel began hiring, he
was disappointed that the people he hired often lacked
the hard skills his company needed. They also lacked
soft skills such as creativity, motivation to work hard, and
the ability to learn quickly. Faced with no other option,
Kngine created a rigorous in-house training program
that new hires have to complete in order to secure a job.
Now, when Kngine makes a job offer, it is contingent
upon the candidate attending and successfully graduating
from “Kngine University.” Potential new hires study
intensively on-site at Kngine’s offices, completing a
dozen software engineering and artificial intelligence
courses that are publicly available online through Stanford,
MIT, UC Berkeley, and other universities. After four to
six months, participants take exams; if they pass, they
begin their employment with Kngine. “Kngine University
has worked very well. It’s much, much, much better
than hiring the normal way,” says El Fadeel. As of writing,
nine candidates have undergone the training, with eight
graduating successfully.
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P. 28
Barriers: Expanding Into New Markets
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P. 29
I. Attar
Figure 22:
Challenges to market expansion - Entrepreneurs vs. Experts
ENTREPRENEURS AND EXPERTS AGREE THAT FINDING PARTNERS IS
THE BIGGEST CHALLENGE TO GEOGRAPHIC EXPANSION
Forty-seven percent of entrepreneurs said that finding partners
was a challenge to geographic expansion, followed by costs
(40%) and legal processes (28%) for setting up a company.
Experts also identified finding partners as a top challenge (53%),
followed by the legal processes for setting up (46%) and
finding local talent (24%).
Finding partners to
facilitate expansion
47
53
Cost for setting up
40
24
Legal process for
setting up business
28
46
Finding local talent
24
28
Assessing market size
& demand
17
27
Language barriers
1
2
Other
4
4
No challenges
6
4
Entrepreneurs
Experts
Base: Entrepreneurs (n=768) vs. Experts (n=169)
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P. 30
Figure 23:
Challenges to market expansion - Scaleups vs. Non-scaleups
ALTHOUGH MANY HAVE EXPANDED INTO NEW MARKETS,
NEARLY HALF OF SCALEUPS CITE FINDING PARTNERS AS A
MAJOR CHALLENGE FOR EXPANSION
Both scaleups and non-scaleups cite finding partners to facilitate
expansion as a top challenge (46% and 55%, respectively). The
second most-cited hurdle is costs for setting up (35% and 38%
of scaleups and non-scaleups, respectively).
Finding partners to
facilitate expansion
46
55
Cost for setting up
35
38
Finding local talent
28
23
Legal process for
setting up business
25
20
Assessing market size
& demand
13
18
Language barriers
1
1
Other
2
6
No challenges
10
5
Scaleups
Non-scaleups
Base: Scaleups (N=165) vs. Non-scaleups (N=167)
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P. 31
[BOX 4] DISCUSSION:
Follow-up interviews and survey data suggest that challenges
to regional expansion in the MENA region are multi-faceted,
consisting of barriers to both dealing with regulations and
identifying partners. Both experts and entrepreneurs pointed
to the legal and financial hurdles of entering new markets as
challenges to expanding geographically.
“What has been and will continue to be the
largest barrier to scale in MENA is the legal
structure in which businesses have to operate.
It remains very difficult and costly to set
up and scale a business into a new
country from a legal perspective.”
– Rabea Ataya (Bayt.com, UAE)
“It is difficult to build credibility in new
markets.You need to rely heavily on local
networks.” – Fadi Barghouti (Curlstone Studios,
Jordan)
However, during interviews both groups pointed to multiple
issues impinging on efforts to identify partners including
developing credibility in new markets and simply being aware
of relevant players in the local private sector, suggesting that
the obstacles to entering new markets are not purely regulatory.
To help more entrepreneurs expand regionally, regulatory
challenges as well as obstacles to forming strategic partnerships
will need to be addressed.
Case Study 4: Chifco’s expansion through localization
Chifco is a Tunisian company that provides energymonitoring services for corporations. Established in 2008,
the company originally operated with a B2C model,
but later shifted to a more tailored outreach plan,
as energy monitoring is still nascent in MENA. As the
company expanded, it needed to develop unique
solutions to address the local culture in each target
market, employing varying partnership structures to
engage new customers. Specifically, the team has had
to decide whether or not to use its own brand, sell
through a partner’s brand or develop a different image
uniquely fitted to the local context. Founder Amine
Chouaieb says that the third option has become a
choice approach when moving from Western to MENA
markets, even when targeting different countries in the
MENA region. Steadily, Chifco has expanded its presence
to reach three continents, with a total of 30 employees.
The company is also exploring expansion into Italy,
Jordan and Saudi Arabia. By providing services that are
in demand regionally and globally, Chouaieb and his
team aim not just to become a leader in their field, but
also to, in the longer term, promote the Middle East and
North Africa as a global source of technology solutions.
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Concl u s io n
Wamda Research Lab – THE NEXT STEP: Breaking Barriers to Scale for MENA’s Entrepreneurs
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J. Kalan
Economic and social prosperity in the MENA region cannot be achieved without widespread and sustainable
job creation. Entrepreneurs are critical to these efforts, yet in order for them to contribute meaningfully to
the region’s employment agenda and foster thriving societies, they must be able to scale their companies.
SUPPORTING STARTUPS TO SCALE WILL CRITICALLY AID THE MENA REGION IN
ADDRESSING UNEMPLOYMENT AND ACHIEVING SUSTAINABLE ECONOMIC GROWTH.
Entrepreneurs and experts have similar opinions
on the barriers to scale. Additionally, despite
companies having different growth rates, they
share similar challenges, both as an internal factor
in their company culture, and externally when
looking for support in the surrounding ecosystem.
Our research suggests that although access to
capital and revenue generation are two of the most
prevalent hurdles for companies looking to sustain
growth, the path to successful scaling has multiple
barriers that require our attention.
Not only are there a variety of barriers the challenges
have both internal and external components. For
example, when identifying the challenges to building
a team, both entrepreneurs and experts cite
external challenges with finding talent, but also
point to internal difficulties when identifying the
proper incentives for retaining employees. Solving
each facet of these challenges will require
coordination between funds, incubators, NGOs,
mentors, angel investors, universities, government
programs, entrepreneurs and their teams, as
expertise must be pooled to create sustainable,
holistic solutions.
Fortunately, there are already multiple institutions
in the MENA region that are contributing solutions
(See Appendix 3 for a sample list of institutions
actively addressing these challenges). Groups like
Dash Ventures and BECO Capital are examples of
venture capital funds supporting entrepreneurs, while
programs such as Astrolabs help startups to scale by
advising entrepreneurs on a number of growth factors.
Additionally, policy changes are also improving
business environments. In 2000, the World Trade
Organization welcomed Jordan as the country
liberalized its services sector to enhance access to
foreign investors and service providers.16
Similarly, Morocco eliminated the minimum capital
requirement for limited liability companies in 2013.
That decision, along with the institution of several
banking reforms over the past several years, have
made Morocco one of the most friendly countries
for SME lending in MENA.17
The following are four priority areas for addressing these
barriers. In future research, we will continue to analyze
these challenges in order to provide the ecosystem
with a stronger understanding of sound strategies for
helping startups to scale in the MENA region.
16. Ministry of Industry and Trade, Jordan
17. World Bank Doing Business Report, 2014 and World Bank The status of bank lending to SMEs in the Middle East and North Africa region, March 2011.
P. 34
Figure 24: Priority areas
The Next Steps
FACTORS
CHALLENGES
NEEDS
Increasing Revenue
Marketing talent
Market knowledge
Improving the amount of marketing talent while also enhancing market access
and education will help both entrepreneurs and consumers.
Boosting Investment
Supply
Communication
Increasing access to capital is imperative. In parallel, improving knowledge
sharing between entrepreneurs and
investors will enhance funding opportunities.
Attracting Talent
Finding talent
Retaining talent
Updating regional education systems
will directly improve local talent pools,
but these efforts must be accompanied
by incentivizes and programs to ensure
that startups can retain talent.
Facilitating Expansion
Finding partners
Market access
Reducing legal challenges and costs will
facilitate enterprise expansion. In parallel,
initiatives to support entrepreneurs in
identifying strategic partners will greatly
boost startups’ chances at success.
Despite prodigious efforts on the ground throughout the MENA region, more players are needed to
reinforce startup growth. Helping entrepreneurs to scale and enhancing regional economic growth by
creating jobs is a long process that will hinge on contributions from the public, private and civil sectors
across the ecosystem. Just as the MENA ecosystem has demonstrated over the past several years
that it can help startups to take root, it must take the next step to push them to scale.
Wamda Research Lab – THE NEXT STEP: Breaking Barriers to Scale for MENA’s Entrepreneurs
P. 35
Appen dix
Wamda Research Lab – THE NEXT STEP: Breaking Barriers to Scale for MENA’s Entrepreneurs
P. 36
N. Baouab
APPENDIX 1 – ACKNOWLEDGMENTS:
We would like to thank the following institutions and individuals for their support in lending their
expertise and connecting us to entrepreneurs in each of their countries. Without their contributions,
we would not have been able to complete this study:
COUNTRY
UAE
UAE
Jordan
Lebanon
MENA
Morocco
MENA
Bahrain
Lebanon
Palestine
Saudi Arabia
Morocco
Jordan
Egypt
UAE
UAE
Jordan
Tunisia
MENA
Egypt
Jordan
Lebanon
Jordan
Jordan
Egypt
Lebanon
Palestine
Egypt
MENA
Jordan
Palestine
UAE
Lebanon
UAE
Saudi Arabia
North Africa
Saudi Arabia
Tunisia
Morocco
Lebanon
MENA
Jordan
Lebanon
MENA
Egypt
MENA
Jordan
MENA
Egypt
Saudi Arabia
Jordan
Egypt
Palestine
Egypt
Jordan
Palestine
Jordan
Lebanon
Lebanon
Jordan
Saudi Arabia
UAE
Palestine
Jordan
Egypt
Bahrain
Bahrain
Lebanon
Bahrain
Egypt
Lebanon
Tunisia
Lebanon
INSTITUTION
Abu Dhabi University
Abraaj Group
Ahmad Zaidan
Aline Mayard
AMIDEAST/Ciscso Entrepreneur Institute
Association Marocaine des Investisseurs en Capital (AMIC)
Aureos Capital
Bahrain Development Bank
Berytech
Business and Technology Incubator (BTI) at the Islamic University of Gaza (IUG)
Centennial Fund
Centre National pour la Recherche Scientifique et Technique (CNRST)
Dash Ventures
The District Egypt
Dubai Silicon Oasis
Dubai SME 100
E2E Investment
Elgazala Technopark
Business Development Center
Endeavor Egypt
Endeavor Jordan
Endeavor Lebanon
Estee Ward
Faris Mokhdadi
Flat6 Labs
Glen Dalakian
Ibrahim H. Abu Kteish
Ideavelopers
InfoDev, World Bank
iPark
Jaafar Abusair
Jabbar Group
Kafalat
Kia Davis
King Abdulaziz City for Science and Technology (KACST)
Maghreb Startup Initiative
Malaz Capital
Manouba Technopark
Maroc Numeric Fund
Maya Rahal
MENA 100
MENA Venture Investments
Middle East Venture Partners
MIT Enterprise Forum
Mohammad Omara
Mowgli
Nafez Al Dakkak
National Net Ventures
Nile University
Norah Magraby
Oasis 500
OT Ventures
Palestine Information and Communications Technology Incubator
Plug and Play
Queen Rania National Entrepreneurship Competition
Rafat M. Abu Shaban
Rehaf Al-Khateeb
Reine Farhat
Roland Daher
Sameh Abu Jarrar
Saudi Fast Growth 100
Serene Touma
Shadi Atshan
Silicon Badia
Tahrir 2
Tamkeen
Tenmou
UNIDO Lebanon
UNIDO Bahrain
Vodafone Ventures
Wamda Capital
Wiki Startup
Zeina Tabbara
Wamda Research Lab – THE NEXT STEP: Breaking Barriers to Scale for MENA’s Entrepreneurs
P. 37
APPENDIX 1 – ACKNOWLEDGMENTS: KEY INDIVIDUALS INTERVIEWED
We would like to thank the following individuals for providing time for an interview during the research process,
between March and June 2013. Their support and conversations offered immense insight into the processes
and challenges that scaling companies are facing and was a very valuable contribution to the study:
COUNTRY
Egypt
Saudi Arabia
Lebanon
UAE
Jordan
Egypt
Egypt
UAE
Jordan
Egypt
Tunisia
Egypt
Jordan
Egypt
UAE
Tunisia
UAE
Egypt
UAE
UAE
Egypt
Lebanon
UAE
Lebanon
Jordan
Jordan
UAE
Palestine
Jordan
Egypt
Jordan
Lebanon
Bahrain
Egypt
Tunisia
Saudi Arabia
Egypt
Egypt
UAE
Lebanon
Lebanon
Palestine
UAE
Morocco
Lebanon
Morocco
Palestine
Jordan
UAE
Egypt
UAE
Saudi Arabia
Morocco
Egypt
Jordan
Morocco
Egypt
Tunisia
Egypt
Bahrain
Saudi Arabia
UAE
Tunisia
Egypt
Morocco
Egypt
Jordan
Lebanon
Saudi Arabia
Lebanon
Saudi Arabia
Jordan
Jordan
NAME
INSTITUTION
Abdullah Assal
Offerna
Abdulmohsen M. Aleisa King Abdulaziz City for Science and Technology (KACST)
Abed Agha
Vine Lab
Abed Bibi
Honey Bee Tree Ventures
Ahmad Takatkah
Sinbad Ventures
Ahmed El Hussaini
Splinterme
Ahmed Essam
F16 Apps
Alexandar Williams
Dubai SME 100
Ali Dahmash
Reach 2.0
Amad Al Masaodi
Aqar Map
Amine Chouaieb
Chifco
Amira Fustany
Fustany
Amjad Tadros
Shoofee TV
Amr Shady
TA Telecom
Angus Paterson
STC Ventures
Bilel Bouraoui
ZouZ
Catalin Cighi
Cain
Con O’Donnell
MC Egypt
Dana Abdelhadi
Expose Communications
Dany Farha
BECO Capital
Dr. Sherif Kamel
American University in Cairo
Edy Maroun
Anghami
Elias Ghanem
PayPal
Elie Khoury
Dermandar
Emile Cubeisy
Silicon Badia
Fadi Bargouti
Curlstone Studios
Fadi Malas
Just Falafel
Faris Zaher
Yamsafer
Fida Taher
Zaytouneh
Gamal El Din Sadek
Bey2ollak.com
Hagop Taminian
Silicon Badia
Hala Labaki
Shahiya.com
Hasan Haider
Tamouh
Hashem Zahran
The Founder Institute (Alexandria)
Hassine Labeid
Saphon Energy
Hattan Ahmed
Arabrooms.com
Haytham El Fadeel
Kngine
Heba Gamal
Endeavor Egypt
Helen Uzaizi
Mowgli Foundation
Hind Hobeika
Butterflye
Imad Khairallah
Bader and Lebanese Business Angels
Jacob Korenblum
Souktel
Karim Djerboa
Endeavor UAE
Karim Jazouani
Valhalla Interactive Consulting
Karim Majdalani
Intramuro
Khalil Azouzi
Sherpa Finance/Dayam Fund
Laith Kassis
World Bank infoDev
Lana Alamat
Wamda
Loulou Khazen
Nabbesh.com
Mahmoud Abdel Fattah BKam
Mark Hirst
Blue Beetle
Marc Saroufim
Law Office of Abdulaziz H. Al Fahad
Matthieu Malan
LivreMoi
Moatasem Osam
E-Masary
Moe Ghashim
Shopgo
Mohamed Attahri
Greendizer
Mohamed Donia
Ideal Ratings
Mohamed Mehdi Khemiri Innovest
Mohamed Rady
Inno 101
Mohammed Abdulrahman Live Gaming
Mohammad Al Obaid
Law Office of Abdulaziz H. Al Fahad
Mohammed Mekki
AstroLabs
Mondher Khanfir
Wikistartup
Mostapha Abou El Nasr Books.com.eg
Mounia Rkha
Mydeal
Muhammad Ali
Nezal
Muhanad Ebwini
Gate2Play
Mustapha Abed Nour
Wellnesia
Mustapha Nabulsi
Acadox
Nemr Nicolas Badine
Eastline Marketing
Nora Magraby
Naqaa Sustainability Solutions
Nour Khrais
Maysalward
Noura Saad
Tadreesna
Wamda Research Lab – THE NEXT STEP: Breaking Barriers to Scale for MENA’s Entrepreneurs
P. 38
Key Individuals Interviewed (cont’d)
COUNTRY
UAE
Jordan
Jordan
Saudi Arabia
Qatar
Egypt
UAE
Lebanon
Morocco
Egypt
Jordan
UAE
Lebanon
UAE
Saudi Arabia
UAE
Jordan
Egypt
UAE
Morocco
Jordan
UAE
Egypt
Jordan
Lebanon
UAE
UAE
Bahrain
Jordan
Lebanon
Morocco
Egypt
Palestine
Morocco
Jordan
Jordan
Lebanon
Egypt
NAME
INSTITUTION
Novel Tjahyadi
Omar Koudsi
Omar Sati
Osama Natto
Paul Dyer
Perihan Abouzeid
Rabea Ataya
Rabih Nassar
Rachid Harrando
Ramez Mohammed
Rasha Manna
Ravi Bhusari
Reine Abbas
Salam Saadeh
Saleh Al Zaid
Salim Akkil
Samar Shawareb
Samer El Sahn
Samih Toukan
Samir El Chaoui
Sarah Abu Alia
Shant Oknayan
Sherif Nassar
Sohaib Thiab
Tarek Sadi
Tarig El Sheikh
Tom Speechley
Wafa Obaidat
Waheed Bargouti
Walid Mansour
William Fellows
Yasmine El-Mahairy
Yousef Ghandour
Youssef El Hammal
Zafer Younis
Zaid Ayoub
Zeid Feghali
Ziad Mokhtar
Gulfware International Technologies LLC
Jeeran
Dash Ventures
IB Solutions
Silatech
Qabila Media Productions
Bayt.com
ElementN
NETpeas
Flat 6 Labs
Endeavor Jordan
Duplays
Wixel Studios
Y-Plus Ventures
LunarApps
SearchinMENA
Arabia Weddings
Tahrir 2
Jabbar Internet Group
MIC - Moroccan Innovation Center
Art Medium
Glambox
Nefsak
Wizards Productions
Endeavor Lebanon
Knot Standard
Abraaj Capital
Obai and Hill
Dakwak
Middle East Venture Partners
Lixia Capsia Gestionis
Supermama
Fast Forward
Stagiaires.ma
The Online Project
JTronix
Wixel Studios
Ideavelopers
Report Design & Photography
ROLE
NAME
CONTACT
PAGES
Report Design
Photography
Photography
Photography
Photography
Photography
Photography
Aisha Sheikh
Bashar Tabbah
Ibrahim Attar
Jonathan Kalan
Muhammad Makki
Nihed Baouab
Razan Alzayani
www.aishasheikh.com / [email protected]
mgsblade.deviantart.com /‎[email protected]
www.ibrahimattar.com / [email protected]
www.kalan.me / [email protected]
[email protected] / www.alghazalitaha.com
http://500px.com/edbe / [email protected]
[email protected] / http://razanalzayani.com
all
11
1, 17, 21, 25, 29
3, 4, 9, 13-16, 33
5
36
12
Wamda Research Lab – THE NEXT STEP: Breaking Barriers to Scale for MENA’s Entrepreneurs
P. 39
APPENDIX 2:
EXAMPLES OF ECOSYSTEM INSTITUTIONS
The below institutions are already supporting entrepreneurs
throughout MENA. This section is not inclusive of all
institutions supporting entrepreneurs in the region, but
provides a selection of the region’s entrepreneurship
stakeholders.
Accelerators: Working in partnership with industry
leaders, academic institutions and entrepreneurship
training centers, Cairo-based accelerator Flat 6 Labs
offers companies training on marketing, sales, media
and other tools to identify and access customers.
Oasis 500, a Jordanian accelerator, provides entrepreneurs with specialized boot camps, which include
marketing, financial and management training. Both
Flat 6 Labs and Oasis 500 also provide seed funding
and incubation to select companies. Additionally, in
2013 Mercy Corps created Gaza Sky Geeks, the first
business accelerator for entrepreneurs in Gaza.
Beyond the Levant there are other accelerators
including Tunisia’s Wiki Start Up and Dubai’s SeedStartup, both of which were founded in 2011.
Funding sources: Middle East Venture Partners,
Sawari Ventures, Silicon Badia and Aramco’s Wa’ed are
examples of venture capital funds that offer investment
as well as advising and networking for startups in the
MENA region. Outside of the venture capital space,
there are additional funding sources such as Kafalat,
the Lebanese loan guarantee program, which offers
a variety of guaranteed loan tools to SMEs, and
the Khalifa Fund for Enterprise Development, which
provides loans to small and medium-sized enterprises in
the UAE and also offers training and advisory services.
Non-governmental organizations: Jordanian NGO Intaj
organizes trade missions for local ICT companies and
also provides market research on ICT companies,
profiling potential partners for Jordanian’s ICT stakeholders. Based in over 10 countries in MENA, INJAZ
works closely with schools and universities to deliver
entrepreneurship training to students, teaching them
both the skills they need to start their own companies
and the importance of entrepreneurship in their countries.
Additionally, international NGO Endeavor offers high-impact
entrepreneurs in Jordan, Egypt, Lebanon, Morocco and
Saudi Arabia with valuable mentorship and networking
services to scale both regionally and globally.
Mentorship programs: England-based Mowgli
Foundation has created mentorship programs for
entrepreneurs in seven countries in MENA, matching
entrepreneurs with seasoned executives, managers,
investors and other mentors to advise them. Wamda’s
Mix N’ Mentor programs have been implemented in
nine countries, convening entrepreneurs and mentors
in each local ecosystem to exchange knowledge on
key steps of the entrepreneurial process.
University-affiliated programs: The King Abdullah University for Science and Technology’s Entrepreneurship
Center has multiple programs for Saudi entrepreneurs
including a seed fund program, incubator, training and
coaching services. In Egypt, the American University
in Cairo’s Venture Lab provides young startups with
incubation services at the AUC campus, offering
entrepreneurs access to university faculty as well as
business plan competitions. Similarly, Jordan’s El
Hasan Business Park is linked to the Princess
Sumaya University for Technology and is home to
the Queen Rania Center for Entrepreneurship, iPARK
business incubator and the Intellectual Property
Commercialization Office.
APPENDIX 3 - RECOMMENDED READING:
1. The World Bank and the International Finance Corporation, Doing Business
Report – Business Reforms, 2008-2013.
2. Daniel Isenberg, When Big Companies Fall, Entrepreneurship Rises, Harvard
Business Review blog, March 18, 2013.
3. Daniel Isenberg, Multinationals’ unique role in the entrepreneurship ecosystem,
Forbes, November 22, 2010.
4. Erkko Autio, Global Entrepreneurship Monitor, Global Report on High-Growth
Entrepreneurship, 2007.
5. Foster et. al., Global Entrepreneurship and Successful Growth Strategies of
Early-Stage Companies, World Economic Forum, 2011.
6. Emily Ambrose, Endeavor Insight – Impact of Endeavor Chile. December, 2012
7. Graham, Paul. Startup = Growth, http://www.paulgraham.com/growth.html,
2012.
8. Birch, David, The Job Generation Process, University of Illinois at Urbana-Champaign’s Academy for Entrepreneurial Leadership Historical Research
Reference in Entrepreneurship, 1979.
9. Ian Hathaway, Tech Starts: High-Technology Business Formation and Job Creation in the United States, Kauffman Foundation Research Series: Firm Formation
and Economic Growth, 2013.
10. Organisation for Economic Co-operation and Development (OECD), High
Growth Enterprises, Chapter 8. Eurostat − OECD Manual on Business Demography
Statistics, 2007.
The Next Step: Breaking the Barriers to Scale for MENA
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