Building a Startup Ecosystem is Wayid Zain – Part#3

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? 

1.Technical resources: Zain is not only a telecom company, its also a technology company. They have all of the technical resources (talented experienced employees and technical assets)  needed in a Hi-tech startup.
2.Customer base: Zain has more than 35 million customers around the world. For startups having a partner with this huge amount of customers is like a dream come true.

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?

1.Innovation lab: The incubator will be like an innovation lab. Startups are young, diversified, vibrant and full of energy, and Zain should innovative to survive in an industry that is changing very rapidly. Zain will have access to a great source of innovation that will help it to stay ahead of its competitors.
2.Brand awareness: It will be a great way to build brand awareness and to gain respect and appreciation from the Kuwaiti community.

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?

1.Source of talent: Universities is a non-stop flow of talent both in terms of mentors and entrepreneurs. First, the incubator will benefit from the global skills of the professors that can act as mentors for startups. Secondly, both startups and students can benefit from working together. Students get to benefit from working a real life experience and startups benefit from cheap labor.
2.Educating people: Kuwait society need to be more educated about entrepreneurship. Special courses, workshops and studying tracks about entrepreneurship should be developed, and universities are the best place for this to happen.

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?

1.Social benefit: Being part of the incubator will be a good way to give back to the society and the public. At the same time they are building their brand awareness and help in attracting higher quality students.
2.Creating hero’s and role models: If a startup became successful they can claim to be part of the success story. For example, Stanford University benefited a lot from the success story of Google.

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.

If your are not in CrunchBase then you don’t exist

If your startup is not in CrunchBase then you don’t exist. There are now more than 90,000 startups register in Crunchbase from all over the world. CrunchBase is a free database of technology companies, people, and investors that anyone can edit.

If anyone want to know about your company, your team or your investors they usually go to CrunchBase. It is important to be there, especially if you are considering raising some money from  a VC or an Angel investor, then I strongly encourage you to add your startup there. I just found this Kuwaiti company listed there called Q8eGifts.com.

The good thing is that anyone can add the startups profiles without anyone’s permission (most of the data is public anyway). I’ll start adding Kuwaiti startups that I previously wrote about. Take a look at Facebook and Twitter profiles just for fun, and look who are their early days investors and how much money they raised.

I strongly encourage everyone to add their startups in CrunchBase.

Karkoosha.com

Post by Bader:

KARKOOSHA.com is an online exhibition platform providing virtual space for exhibitors from all over the world. KARKOOSHA is a store front solutions for fashion designers, artists, furniture designers, entrepreneurs, or publishers. KARKOOSHA is currently considered one of the high-end fashion destinations in Kuwait and the Gulf region.

My sister told me that the idea all started when Karkoosha team realized that fashion designers in exhibitions need a place to continue showcase their pieces even after the exhibition ends. I like the simplicity of the website, it’s clean and easy to use. Their revenue model is also straight forward, they charge sellers a monthly subscription fees and also take a small cut of each sale.

I heard that they are doing very well and many of the things they post are immediately sold-out. They were also interviewed at Alarabya TV two months ago (couldn’t find the interview though). We hope to learn more about their journey and experience being Kuwaiti entrepreneurs.

Well done Karkoosha team, keep it going 🙂

Creativity vs Copying

I did my last MBA semester in ESADE business school in Barcelona as an exchange student. There I met an interesting entrepreneur that was invited to our class to give a talk about his experience as an entrepreneur. Someone asked him how did he came up with his business idea ? And his answer was shocking. He said:

“My whole family were entrepreneurs, and I know I want to be an entrepreneur. So what I did is go to TechCrunch (the blog I previously ranked No.1), see what successful startups are doing in the US , check if I like the idea, then check if we have it here in Spain. If not, then I’ll do it. This is how I started my company that now generates EU20M every year!!!”

He was also part of one of the most successful incubators in Spain called Seed Rocket. So I talked to him about our Startup and then I asked him if our Startup will be a good fit to the incubator, he immediately asked:
Him: Is there other startups doing something similar?
Me: Somehow yes, a couple but we are different.
Him: Good because if you are the only one doing this then we will not invest in you!!!
While I don’t agree with his strategy, this is a fact. Many first class VCs around the world are now following this strategy especially when investing overseas. They focus their investments in companies that are a copy of a US startup. Some take it to the extremes like Swamer brothers that only invest in companies that clone successful US Startups. Others do it to make less riskier bets such as Sequoia Capital investments in Brazil.
I know that many countries are now adapting the “copy the US” strategy to create a successful local startups. But, these types of companies will not be global brands with a multi-billion dollar business, which means we need to avoid copying in the long-term. However, does it make sense to copy in the short-term???
If you look to history you’ll find that Japan used to copy from British cars in the 50’s and 60’s and now they produce the best cars in the world. Taiwan also used to copy everything, now they produce one of the most sophisticated high-tech smart phones (HTC). China is one giant copy machine, but soon will be a technology hub.
This is the cycle of creativity, starts with learning from others experiences and then starting to build on it. I like this video that illustrate the point I’m trying to make here (at least watch the first 5 min)
The combination of the fact that global investors prefer to invest overseas in US clone startups and the fact that creative nations start with copying not innovating, made me think that copying might be a good solution to get things starting over here . I used to hate copycats so much and I still sometimes do, but I started to realize that it might be a natural step into the right direction, the direction of a creative nation.

Building a Startup Ecosystem in Q8 – Part#2

I started drafting this post in Power Point then I decided to do the whole post in power point instead of typing it in WordPress (I know some of my friends will laugh so hard when they see this, they know how much I’m obsessed with power point). Todays slides format is an experiment, please let me know if you didn’t like it.

Building a Startup Ecosystem in Q8

I mentioned in a previous post that money is not the main reason for not having a startup activity here in Kuwait. The problem is with not having a healthy environment to establish a startup, in other words we don’t have a startup ecosystem.

Five years ago (more or less not sure) the first P2BK event was organized. P2BK stands for Proud to be Kuwaiti, and it’s an event for Kuwaitis to showcase their small business projects. The event is a great idea to foster and encourage entrepreneurship in Kuwait, however it’s not enough. It’s not enough to transform a startup into a successful company that can compete globally and employ thousands of Kuwaitis. P2BK is a good start, but we still need to do more.

What we need is a Startup Ecosystem (or Startup Community). What does a Startup Ecosystem consists of? Good question, a startup ecosystem include:

1.Entrepreneurs: Crazy people with awesome ideas
2.Mentors: Usually successful entrepreneurs with a good track record
3.Government: The government should be committed to help startups and make their life easier
4.University: They are the source of talent and innovation
5.Investors: The source of funding
6.Service providers: Provide office space, legal help, accounting….etc
(Source: Brad Feld blog)

So what do we have here in Kuwait? Honestly, nothing. We don’t have enough entrepreneurs that are willing to share their experiences. The government is just horrible. Moreover, the university is disconnected from the outside world and investors don’t exist. Maybe the only thing we have is service providers, which we can survive without them anyway.

So many things are missing from the Startup Community equation and there is no magic stick to solve the problem. True, there is no easy solution, but I think I have a good idea in how to kick start the Kuwaiti startup scene and transform Kuwait to a vibrant place. In the next few posts I’ll explain the idea that came to me after working with two great organizations, one is called Wayra and the other is called Endeavor.

Update: Click here to read Building a Startup Ecosystem part#2

Dishdasha Express#1

Dishdasha Express is one of my favorite startups in Kuwait. I love the idea and I think it has a huge potential. “Dishdasha express is a Kuwaiti established company that was co-founded in 2010 by four cousins who wanted to put new high standards in tailoring the traditional middle-eastern man’s Dishdasha!” quoted from their website.

The idea is to have a tailor coming to your home instead of going yourself to the tailor shop. That’s make perfect sense to me.

I met with the team back in P2BK event and was amazed with the quality of their design and the depth of their understanding of the business.

So I bought some fabric yesterday and now I want to try Dishdasha Express.

To place an order you need to make a phone call (no online ordering yet),  then  you need to agree on a time and place to take your measurement and handle in your fabric. The idea was to try with one Dishdasha first to minimize the risk (my mom was worried they are going to waste the fabric). However, the guy told me that the minimum order is 3 dishdasha’s. Hmmmm, I stopped talking for a minute and then thought  “am I willing to invest money in this startup, my answer was……..YES”. So I told the guy, OK go ahead place an order for 3 dishdasha’s.

Now I’m supposed to have the tailor at my house at 10PM tomorrow. Let’s see how it goes.

iBadala

Didn’t know about this app before, I’ll download it right now.

The rest of the post is by Bader:

I tried iBadala app on my iPad (since I don’t have an iphone) and I loved it. The app helps a lot especially when you are outside and trying to find a specific number quickly. The app also contains categories for different sectors in Kuwait like Government Agencies, Hotels, Restaurants .. etc. It also lets you as a business owner (or any kind of local entity) to list your number in the app directory.

Basically the app is easy to use and does it’s job (finding phone numbers) very well. The founder of iBadala is Abdulaziz Al Mejel, good job.

Burn Your Business Plan

Last year my team and I won the best written business plan in Asia during the Asia Venture Challenge in Thailand.

Still I’m telling you that you should Burn Your Business. Why?? Because it’s the biggest waste of time. It takes you at least 1 month to finalize a business plan. Instead, you can build a prototype of your product and get feedback from real customers. Some startups even manage to build their whole product in one month, and start making money!!! A business plan is an execution plan that is static, hard to modify and full of assumptions. While a Startup should be dynamic, easy to change and based on validated assumptions.

In a business plan you are assuming you know everything. You know your market, customer need, how many people you need to hire and how much money you are going to make within the next five years!!!! So based on your magical business plan you start hiring, building and investing tons of money all based on assumptions. I have a bad news buddy, “No Business Plan survives first contact with customers”, Steve Blank. That’s soooooooo true.

But, you’ll say business plan makes me understand my business and prepare me for different scenarios. That’s true, but we need to understand that in a startup you are searching for a business model not executing a business model. Business Plans are execution plans and they are originally built for large companies with pre-known customer needs, customer segments and market. In a startup we are still not sure about our customer needs, our market, our revenue model and our cost structure.

So what should we do, no planning at all?? No you still need some guidance and here comes the Business Model Canvas to save us. Business model canvas is a dynamic and agile tool that help startups to understand their business model and guide them to validate all of their assumptions. It is easy to understand, easy to use and makes it easy to do major changes in your startup . It also pushes you to go out of the building and talk to your customers, your suppliers and your partners.

Trust me, Burn Your Business Plan and start using the Business Model Canvas instead.

Urban Moon

This is the first post about Startups in Kuwait. The first startup featured is a mobile app called Urban Moon. The post is written by Bader:

UrbanMoonKuwaitGuide has an iPhone app that is very useful … it works as a tour guide for people in Kuwait, where you can just type the name of the location (or choose by category whatever place you want) that you want to go to and the app will bring the address and other contact info directly to you. Actually, I found it excellent for finding the phone number of a delivery-service restaurants or restaurants that you need to call to get your table reserved. They also have an Androidapp and it looks great. This is one of the few good android apps made by a Kuwaiti company which we think is excellent and we encourage everybody out there to try it.

We believe the App has been acquired or sponsored by Watanya, since Watanya logo is now shown ontop of  Urban Moon logo in App store!! Good job Pink Moon team.

If anyone knows more about this please let us know.

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