Boot camps send start-ups skyward
Mohammed Alborno is the kind of entrepreneur who would make many Canadians proud.
His start-up, Crowdsway.com, is aimed at filmmakers hoping to exchange videos or hire talent for new projects.
And it recently launched in a city often referred to as the "Hollywood of the North" - Vancouver. His site went public on July 1 this year, which also happened to be Canada Day.
But as Canadian as Mr Alborno's venture may seem on the surface, its roots actually trace back to Egypt and, specifically, Flat6Labs.
That is the name of the start-up incubator and accelerator where Mr Alborno received advice and financial support to begin Crowdsway, as well as the introduction that ultimately led him to relocate his business from Giza to Vancouver.
"If you start in the Middle East you might end up owning the Middle East [market]," Mr Alborno recalls hearing from an investor at Flat6Labs, who added, "You should go international."
As more entrepreneurs from the Middle East and North Africa are keen to launch an online or tech-based venture, some are turning to start-up hubs in countries such as Egypt, Jordan, Lebanon and the UAE.
They typically obtain free office space and cycle through three to six-month-long programmes, where angel investors, venture capitalists and tech experts critique their business models, provide guidance on expansion plans and offer much-needed cash to get going in exchange for a share of their company.
"One of the areas that has gained popularity after the [revolutionary] changes in [parts of] the region are indeed incubators/accelerators all over the region," says PK Gulati, the chief executive of the tech firm Optimistix Ventures and a past president of TiE Dubai, a group that fosters entrepreneurship.
"A lot of them are focused and run by passionate past entrepreneurs, hence filling a space long vacant and a pent up need for supporting start-ups."
Flat6Labs in Giza has invested in 18 companies since it began operations just weeks before the Egyptian revolution in January last year and it plans to fund another handful before this year ends.
In Beirut, Seeqnce announced in August it would be investing US$76,000 (Dh279,117) worth of prize money and consultancy fees for each of the eight new tech start-ups that made the cut from an applicant pool of 430 entrepreneurs.
And Oasis500 in Amman awards an initial seed investment of 22,000 Jordanian dinars (Dh114,129) in cash and services to selected winners.
"I think there are too many innovative, good ideas," says Ramez Mohamed, the chief executive of Flat6Labs. "There are much more after the [Egyptian] revolution because more people want to start something and help with the economy. Not all of them have access to funding, especially at this [early] stage."
But aspiring tech start-up owners such as Mr Alborno should know any awards they earn come with a catch.
Each start-up lab that provides financial assistance earns a stake in a venture and some entrepreneurs say these offers can be significantly lower than those made by individual investors or incubators in western countries.
SeedStartup in Dubai asks for about 10 per cent for a $20,000 to $25,000 investment and runs up to a 30 per cent share at Seeqnce. At Flat6Labs, $10,000 to $12,000 requires a 10 to 15 per cent cut of the company.
For entrepreneurs, finding the best fit comes down not just to how much of their venture they would be giving up but who exactly might be the mentor.
"The most important thing that aspiring entrepreneurs should look for when entering an incubation programme is to look at the pedigree of the incubator and the mentors that it provides," advises Mr Gulati. "With the growing popularity of entrepreneurship and incubators there is also a proliferation of questionable value provided by many."
Entrepreneurs must also pass a competitive application process, then survive a gruelling business boot-camp.
While founding Yadget, a mobile app that helps brands engage with customers more efficiently, Mohamed Kash had weekly networking dinners through Flat6Labs. Investors and other entrepreneurs helped him focus on certain key features while ignoring others.
The American University in Cairo and industry professionals provided business education and "the structure of the programme pushed us to finish a prototype fast due to deadlines we have to meet", says Mr Kash.
Sometimes entrepreneurs may need less-formal support.
The digital entrepreneurs Sami Mustafa Mubarak and Mina Nagy Michel Takla received a helping hand in the form of office space and strategic advice when they co-founded Taghreedat.
The venture harnessed more than 2,500 volunteers who introduce more Arabic content to Twitter, Wikipedia and other websites.
Despite being based in Qatar, Mr Mubarak and Mr Takla garnered this support from twofour54's ibtikar initiative in Abu Dhabi, which targets early-stage ventures and young Arabs with promising ideas in media.
Still, surviving a formal start-up lab environment can help prepare entrepreneurs in a way mere money or office space might not.
"They main thing is they give you structure and a deadline to launch your website or product," says Mr Alborno. "It made my idea real and … gave it a higher chance of succeeding than if I continued alone."
Published: September 6, 2012 04:00 AM