This is the last post in this series, and as I mentioned in the previous post, I’ll try to answer the following questions: Who should establish the incubator? And how should the incubator be structured?
The incubator should be established by…………Zain. Yes, Zain the Kuwaiti telecommunication company.
Why Zain is a good fit to create the incubator?
3.Global network: Zain is spread in 9 different countries. This adds much value to startups. It will be much easier for startups to grow internationally if they have a partner that have more than 10 years experience operating internationally with a strong global network with governments, suppliers and partners.
How Zain is going to benefit from this incubator?
3.Financial return: Zain will have a real equity stake in these startups. These startups might end-up being a very successful businesses that generates millions of dollars. Some other startups might also be an important partner, supplier or product that gives Zain a competitive advantage over its competitors.
I was part of Wayra, which is an incubator in Spain part of Telefonica (The Spanish telecommunication giant, that also owns O2 in UK and also operates in most of South American countries). Telefonica opened more than 9 Wayra offices around the world in 6 months!! Telefonica will benefit substantially from these incubators and now it is considered probably the smartest Telecommunication organization in the world. Check this article.
But, now I want to answer the second question. How should the incubator be structured? Should Zain own the 100% equity in the incubator?
I believe we need to have a more balanced structure with a shareholder that have more than just financial incentives. The second shareholder should also have social responsibilities towards the community. I know, your thinking the government, but no its not the government. I believe we need a University to be part of the structure.
I believe GUST should be part of the incubator with an equity stake of 25%.
Why we need a university?
3.Diversity: Non-public universities are a good source of international students. It is proven that diversity helps unlock creativity and innovation. Having a diversified teams in the incubator is also a key element to its success.
Why Universities need the incubator?
3.Real market need: Being close to startups, will give the university a closer look to what recruiters are looking for in a fresh graduate. They will understand what does the market need, thus what type of courses they need to add or what courses they need to update or remove. The fresh graduate students will be more prepared for the real world, and will be in higher demand.
Zain and GUST will be the main shareholders in the incubator. However, they don’t have the required experience to run an incubator. A specialized team should be recruited to run the incubator. This might need another post in the future in who should run the incubator.
In short, to accelerate the startup scene in Kuwait we need an incubator. The incubator should be owned by a leading technology company, and we believe that Zain is a good fit for this role. Moreover, adding a university to the mix will keep the balance and will add much value to the whole startup ecosystem.