Bold visions from Middle East entrepreneurial start-ups

Start-ups in the Middle East are being encouraged to “Think Big” as they are helped to tap into the resources Silicon Valley has to offer.

Riham Mahafzah, a co-founder of Jordanian start-up Gallery Alshark, pitches her business at the MIT Enterprise Forum Arab Startup Competition in Doha. Courtesy Riham Mahafzah

Riham Mahafzah, a co-founder of Jordanian start-up Gallery Alshark, is proof of how Middle East entrepreneurs can tap into the Arab-American network of Silicon Valley trailblazers looking to help the next generation of business founders.

In the past 18 months, she placed third in the MIT Enterprise Forum Arab Startup Competition in Doha; had a month's intensive mentoring with TechWadi, a non-profit in San Francisco that builds bridges between Silicon Valley and the Arab world, and returned to Silicon Valley for a week-long visit as part of a group of 30 rising Middle East entrepreneurs. Now the businesswoman is in San Francisco participating in a four-month accelerator programme run by 500 Startups.

Although near the start of the programme, Ms Mahafzah has already tweaked her business, which sells stock images online. She now believes her market extends beyond just the Middle East to eastern Europe, Turkey and Asia and has changed her company’s name from Gallery Alshark to Silk Road Images to reflect the larger geographical reach.

“This is one of the benefits of coming here,” she says. “I found out that my market is not only the Arab world.”

The validation of her business from her American advisers has also encouraged her.

“We know there is a need for this content for the Arab world but hearing this from American mentors, that I am on the right track, adds a lot,” she explains.

Ms Mahafzah received US$100,000 in seed funding from 500 Startups in addition to $300,000 from other investors. Her priority now is connecting with advisers with relevant experience who can help to accelerate the growth of her business.

There are “so many things” that Middle East start-ups can gain from exposure to Silicon Valley, according to Mohammad El Bibany, the programme director at TechWadi. While the Middle East’s entrepreneurial ecosystem has evolved considerably over the past five years or so, the Silicon Valley ecosystem remains unsurpassed.

“There is definitely a bit of a science to growing a start-up and there are a lot of people here and a lot of accelerators here who have done it and can show them how it’s done,” he says. “There are tonnes of incredible Arabs – and non-Arabs, obviously – who have made it big here and who are willing to work with these companies.” This may take the form of advising, mentoring or even investing. Luminaries include Cloudera’s Amr Awadallah, comScore’s Magid Abraham, Simon Khalaf of flurry, BlueKai’s Omar Tawakol and Louay Eldada of Quanergy.

Start-ups are also of interest to tech behemoths like Google and Sap which offer them free services to develop on their platforms. This arrangement can reduce the corporation’s research and development costs. June’s “Arab World Meets Silicon Valley” trip, also organised by MIT Enterprise Forum Arab Startup Competition, included visits to the offices of Google, Twitter and airbnb.

“Just to tangibly see the successes they have become in only a matter of five or six years and where they are headed is really interesting,” says Loulou Khazen Baz, the founder of Nabbesh, an online marketplace headquartered in Dubai that connects freelancers with jobs.

Realising there were opportunities to get investment from the US and to scale beyond the Middle East was also useful, Ms Khazen Baz adds.

“It was a great learning experience, “ she says. “It changed a lot of my views. There was one theme that came out of this which was ‘Think Big.’ We think too small in this part of the world and it’s not necessarily the right thing.”

Nur Alfayez, a co-founder of Feesheh.com, an online shop for musicians in the Middle East, is also currently with 500 Startups and focusing on learning how to grow her business.

“It’s an amazing opportunity because it give us validation globally and exposes us to people who are more experienced in the IT sector than in the Middle East,” she explains. “They have been in the market for longer. You find people with the experience you need exactly.”

While mainstream angel investors and venture capitalists may not be ready to invest in Middle East start-ups, Arab-Americans are more likely to do so. “Diaspora members – either investors or wealthy individuals who have an affinity for these guys – have shown they are interested in support on an angel level,” says Mr El Bibany. “Some of the biggest companies are founded by Arabs and they are willing to give back.”

Christopher Schroeder who wrote about start-ups in the Arab world in his book, Startup Rising – The Entrepreneurial Revolution Remaking the Middle East, agrees that Silicon Valley offers many opportunities.

“Silicon Valley is unique in human history,” he says. “Entrepreneurs anywhere will learn the best practices there, and meet some of the greatest minds. At the same time it is important for Silicon Valley to meet first-hand great new innovators rising bottom up around the world.”

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