Reworking Against My Belief

Relax, I’m not talking about religion here, I’m talking about a book that I just read called Rework. Many of the points made in this business book are controversial,  against common sense and against our own beliefs. But, I love it for that. I had this book in my reading list for a while now and I finally read it. The authors of the book are the Co-founders of 37signals  Jason Fried and David Hansson. I had the honor to talk to Jason Fried (via Skype) during an entrepreneur class back in ESADE, and I remember very well his answer during that day.

I must say that this book had a big impact on me and on how I’ll manage things in my startup. I’d love to share some of the interesting thoughts that I ran into while reading the book. Below are some quotes from the book:

1- “Another common misconception: You need to learn from your mistakes. What do you really learn from mistakes? You might learn what not to do again, but how valuable is that? You still don’t know what you should do next“. That goes against one of my previous posts titeled “Celebrate Your Failure“!!

2- “You can turn a bunch of great ideas into a crappy product real fast by trying to do them all at once. You just can’t do everything you want to do and do it well“, they go on later and denote a whole chapter titeled “Say no by default“. That conclusion goes well with what I meant in the “The Dragon Stage” post.

3- “Don’t believe that “customer is always right” stuff. Making a few vocal customers happy isn’t worth it if it ruins the product for everyone else

4- “How should you keep track of what customers want? Don’t. Listen, but then forget what people said.” Then they explain “The requests that really matter are the ones you’ll hear over and over. After a while, you won’t be able to forget them

5- “Why grow?” is a whole chapter arguing that people are obsessed with becoming big. He continues with asking “What is about growth and business? why is expansion always the goal? What’s the attraction of big besides ego? What’s wrong with finding the right size and staying there?“. This is one of Jason’s most famous arguments, he argue’s that in many cases staying small is better for the business. His multi-million company 37signals that runs many successful products such as Basecamp and Campfire have only 35 employees!!

6- In an interview with Fastcompany 2 days ago Jason said that “My business icon is my cleaning lady”, he carries on explaining:

She’s on her own, she cleans people’s homes, she’s incredibly nice. She brings flowers every time she cleans, and she’s just respectful and nice and awesome. Why can’t more people be like that? She’s been doing it some twenty-odd years, and that’s just an incredible success story. To me that’s far more interesting than a tech company that’s hiring a bunch of people, just got their fourth round of financing for 12 million dollars, and they’re still losing money. That’s what everyone talks about as being exciting, but I think that’s an absolutely disgusting scenario when it comes to business.

I hope you found these points useful and insightful as I did. I also highly recommend reading the whole book, or at least following Jason in twitter @jasonfried.

One last thing, how about you follow startupq8 via email, just click on Follow on the right-side bar. You can also get the twitter feed through following me @a_alshalabi

Let’s Learn from the Angry Birds

And by Angry Birds I mean Finland.

So our next destination on learning how to establish a Startup Ecosystem is Finland. Why Finland? Well, I believe that Kuwait and Finland have some similarities in terms of demographics yet they are very different:

  • Finland is ranked no. 21 in terms of GDP per capita higher than UK, France and Japan (Kuwait ranked 11th)
  • Finland is considered one of the most active countries in terms technology and innovation. Regardless of it’s small population (only 5.3M people) , Finland is the home of Nokia and some other successful companies such as MySQL, Linux and Rovio (game maker of Angry Birds)
  • Finland have one of the best education systems in the world (Ranked no 1)
  • Finally, Finland have a long track record in supporting their Startup Ecosystem and we can learn a lot from their experience.

As you know by now Angry Birds is a Finnish startup (Finnish not Finish, Finnish refers to something or someone from, or related to, Finland) and I’m so grateful for this game, and Conan as well, watch this video:

The Finnish government created many agencies to boost entrepreneurship and innovation such as Tekes, Sitra and FINNVERA, yet they realized that they failed to build a first class startup ecosystem because they realized that even after more than 20 years of government support for innovation and startups, they failed to produce a fair number of successful global companies.

So why did this happened? Why Finland didn’t succeed in establishing a first class Startup Ecosystem? (The reasoning below is based on Steve Blank visit and VICTA report)

  • Public direct funding: The government tracked it’s performance by measuring the number of companies funded every year. But, it’s not about quantity, it’s about quality. The government gave money like crazy, most companies created are lifestyle companies that don’t become large companies at the end and they don’t create any jobs. Its nice to give everyone a chance, but that wasn’t what the whole system was built for
  • Risk aversion: Risk aversion attitude lead to accepting businesses that have a high possibility to survive, but that doesn’t have high potential to become large companies that change the world.
  • Lack of international skills: Lack of global business competence and serial entrepreneurs. Talented people only work in big companies.
  • No viable VC industry: Lack of real venture capital activity. Most of the activity is derived by public funding.
  • Lack of business competences: Lack of business competence that help companies to grow globally and attract global investors and international talent.
  • Finland didn’t consider the globally existing systems to learn from their experiences

And these are the suggested solutions (also based on Steve Blank visit and VICTA report):

  • Indirect funding: The government should stop funding startups directly and should instead fund global incubators and VC’s that can then start funding Finnish startups based on commercial and market driven criteria’s.
  • Remove lifestyle companies from the equation: Lifestyle companies are not growth companies, they will not create jobs or add value to the society. This type of companies should be removed or separated from the startup ecosystem. These companies are sucking resources (time and money) and distracting the government performance measurement indicators.
  • Attract global talents: Transform the Finnish early-stage startup ecosystem to support the infusion of talent from the leading global talent. Laws, regulations and tax incentives should all be fixed to support this goal.
  • Fix government strategy: The government should shift it’s strategy from just helping Finnish people to start their own business to supporting startups that have the capability to generate a multi-million business. The vision should be driven to: generate more jobs, attract foreign investments, create global successful companies and attract international talents.
  • Fix culture and attitude challenges: The government should have a plan for a campaign to change the anti entrepreneurial culture. Challenges such as “Money takes care of problems”, Risk vs Reward and Failure vs Success, this mentality should be changed through educating the young generation and through some awareness campaigns.
  • Fix incubators structure: Currently most incubators are owned by the government. Incubators should optimally be owned by 4 shareholders: a local VC, a global VC, the government and a local university. Also the manager of the incubator should be either a serial entrepreneur or from a VC background. The incubator manager should also have direct or indirect share in the companies being accepted in the program. Moreover, the incubator should not accept more than 20 companies per year.

In short, pouring money into startups will not help in creating successful companies. Many things must be done and many things must be changed, it will take a lot of time and effort. It might take more than 15 years to have a good startup ecosystem, but we might need less if we learnt from other countries experiences such as Finland.

I apologize for the long post and I apologize for ignoring to talk about the GREAT side of the Startup scene in Finland such as what happening in Aalto University, the healthy increase in number of incubators and the creation of a smart startup community. If you are interested to learn more about Finland Startup Ecosystem please read the full analysis I uploaded in  slideshare.

Related Posts:

1- Let’s Learn from Chile#1

2- Building a startup ecosystem in Q8

StartupQ8 Traffic Numbers

I promised that I’m going to share all of the traffic numbers of this blog after each 20-30 posts. We just passed our 40th post so it’s time to share some numbers . I also want to celebrate something, yesterday we had 196 views, which means we passed our previous record of number views in a single day (101 views) . Below is the graph of the traffic during the last 30 days:

As you can see there was a huge jump yesterday and I think its a good case study to learn how we made this jump. As you might know, I wrote a couple of posts 6 days ago titeled  “Let’s learn from Chile“. On the same days I uploaded these posts we only got 30 views per day. But, today we reached 196 views. So how did this happen?

Yesterday there was a post in TechCrunch  titled “China is the Fastest Growing Market for iOS & Andriod Devices, Chile in 2nd“. So what I did is I left a comment in the post, hoping that this will drive some traffic to the blog and also to show my support to Chile (I really wish one day I’ll visit this country and sit with Startup Chile Team). Below is the comment I left:

Watch what happened today and yesterday:


I got most of my views from Chile on the last couple of days, but I also get some good traffic from the US and other countries such as Turkey and Canada.

This is how it looks like now for our all time viewers by country:

In short, leaving a comment in a very popular blog like TechCrunch (2.5M views per day) can generate a lot of traffic to your website if you correctly placed your comment. However, the real question is “How many people will continue visiting your blog or website in the future?” That’s what I’m really interested to know.
I was honored to get that much readers from Chile and from many other interesting countries that I consider as pioneers in creating startup ecosystems. Moreover, I hope they will frequently visit our blog so that they can share with us some of their experiences, thus they help us with building our Startup Ecosystem here in our small country Kuwait.

A kind request: Please follow this blog by subscribing to the email list in the right-side bar, or by following my twitter account @a_alshalabi

Startup Q8 Event

The main reason for me to start this blog is to help in creating a startup community here in Kuwait. My first move was to start this blog, the second was starting an a monthly event called Sartup Q8 (Q8 is a short cut for Kuwait, it’s a phrase first created by Kuwait Petroleum Co.) . The objective of this event is for us to learn from each other experiences and to get to know each other to create a startup community.

I’m thinking that each event should be divided into two parts:
1- Two talks, 20 min each: Get two entrepreneurs to share with us their experiences or by doing a dialogue with them (Q&A). Each talk should not last more than 20 min. The concept will be very similar to a meetup event called Startup Grind (photo below)

2- After the 2 talks we will have a networking event to get to know each other. This networking even will probably help attendances to find their future partner, designer, programmer or even investor. (Note: I hate formal networking events that happens after a conference or a formal talk. We will try to make this networking event less formal and more fun)

The event will be open to everyone, but I believe that founders of current or future online  startups will benefit the most. Moreover, I’d like to reconfirm that the event is not restricted to Kuwaitis, its for all nationalities and for anyone that happens to be in kuwait. Thus, most parts of the event will be held in English. We are also focusing to attract designers, programmers and investors to attend the event.

The event will most likely be held during the last week of Sep and hosted in a coffee shop in Kuwait City. If you are excited and willing to attend the event, please show your support by leaving a comment. We also need some help organizing the event, if you are interested to help, please contact us at startup8@gmal.com (we will give you a free t-shirt as . I’ll post some more details about the event later, please follow this blog either by subscribing to the email list (click on Follow via email in the right bar) or by following me in twitter @a_alshalabi.

Best Vendor

BestVendor helps you find the best work apps to get things done, especially for your online business.

For example, if you need an online payment solution, you can search for online payment then you’ll get a list of alternatives and they will be ranked based on people feedback.

Best vendor is a great tool to find a service provider and also to choose the best between a number of alternatives.

Dishdasha Express#2

First, I want to apologize to Dishdasha Express team for the late post. I posted about Dishdasha Express back in July and I promised to have a part two of the story. I don’t have a good reason for the one moth delay, so sorry again. (if you don’t know what does Dishdasha means, click here)

Many of my friends and family asked me about the experience and the process of Dishdash Express, and I told them to wait for my post, and here it goes:

So after I made my order, they said they will send a tailor to my home the next day at 10PM. The Tailor called me at 9:30PM to confirm that I’m at home and said he will be there at 10PM. He arrived at 10:30PM.

Yousif is an experienced tailor (honestly, I was a bit disappointed that he didn’t have the same mustache shown in the logo). He has more than 10 years working experience in Kuwait. He came to my place with his assistance that was carrying a huge bag of fabrics. So even if you don’t have fabrics, you can choose from the huge variety of fabrics available in this Dishdasha Express Bag.

Then Yousif started doing his job, taking my measurements, and I asked his assistance to take some photos during this process (it took some time to teach him how to take photos, but he did good at the end)

 

The whole process took 10-15 minutes 🙂 After he finished taking the measurement, Yousif told me the dishdasha’s will be ready after 5 working days and they will be delivered directly to my place. They delivered them after 8 working days, still I wasn’t upset or angry at all.

The final result was GREAT (as you can see below). The dishdasha fits perfectly and they remembered to add all of the specifications I asked for. The only thing that I didn’t like was the hard collar. Some of my friends likes the hard collar, but I prefer a soft collar. Maybe I could have get it if I asked for it!! I’ll try to ask about the collar next.

Overall, the experience was as I expected and even better. I’ll give it 9 out of 10, and I’ll highly recommend you to try it.

Honestly, I feel sorry for my old tailor, if he asked me why I’m not coming any more? I’ll tell him Dishdasha Express is changing the game, you either adapt or go out of business.
Really proud of Dishdasha Express team, I’d love to meet you guys in person, please try to get in touch with at startupq8@gmail.com.

The Dragon Stage

The Dragon Stage” is a valuable lesson that I learnt when I was little from a Chinese cartoon TV show. The story goes like this:

One day a master made a competition to his three students. He gave them a paper and a pencil to draw a dragon in 10 minutes. He also said that he will not receive any of the drawings before the 10 minutes ends. One of the three students finished his drawing in just 5 minutes. His drawing was perfect. (looks similar to the dragon in the right).

But, since the student had extra 5 minutes in his hand, he said I’ll add some more stuff to make the drawing looks even better. He started adding some wings, a mustache and more fire everywhere to make it look cooler. At the end, his drawing looked uglier and he lost the competition. His master told him if had stop drawing after the first 5 minutes, he would won the competition!!

In real life, the Dragon Stage is about saying NO for things you can do. It’s about focus. Steve Jobs do a better job explaining this, watch this video taken in 1997 (warning: quality of the video is horrible):

 

It’s easy to lose focus while building a product, people around you will give you some awesome ideas to make your product appeal for a larger audience. You need to be careful, you need to be smart, you should say NO more than YES. Remember, you can’t make all type of customers happy from the first time. It’s about focus, it’s about getting things right one at a time.

Let’s Learn from Chile#2

In the previous post we talked about Startup Chile and how it works. Today we will discuss the advantages and challenges facing Startup Chile and the Chilean Ecosystem.

First, let’s talk about Startup Chile advantages and challenges:

Advantages:

  • Encourage local Chilean people to become entrepreneurs.
  • International teams are contributing to build a first class Startup eco-system.
  • The increase attention from global entrepreneurs, media and investors was a wakeup call to all Chileans that they are capable to change the status quo and become the leading destination of innovation in South America.
  • Attracted many speakers and brilliant minds around the world to help achieve the new Chilean dream.
  • Attracted back some of the local talents that migrated to pursue their dreams on other parts of the world.

Challenges:

  • Startups from abroad usually leave after they spend the 6 months required.
  • The success of the program in recent years doesn’t guaranty success in future years if Chile doesn’t have a competitive advantage other than giving up money for free.

Now, I never been to Chile, I wish I did when I was in Uruguay, but based on what I read and based on Steve Blank’s visit in 2011, these are the major takeaways from the Chilean experience in building a startup ecosystem:

The Good:

  • Even small programs with small budgets can have big impact in the entrepreneurship community
  • Having international teams helped to contribute in shaping a high quality startup ecosystem

What needs more work?

  • Small Business versus Scalable Startup: there’s a confusion in both the Government and Universities about the difference between small business entrepreneurship (startups designed to be family businesses,) scalable startup entrepreneurship (startups designed from day one to scale big inside Chile and then expand globally). To learn more about this check one of my first posts in this blog.
  • There is no focus in a specific field: Entrepreneurship and innovation in what field?  Where will Chile establish technical and innovative leadership?  Is the only way they will attract talent by paying entrepreneurs to come to the country? Or will students and entrepreneurs come to Chile because it is one of the best places in the world for innovation in certain specific industries (pick your favorite – alternative energy? materials science? food science?
  • Lack of connection with big enterprises. Check my suggestion on how to solve this problem here.
  • Lack of Venture Capital and Angel investors

In short, we can learn from Chile that a small initiation like Startup Chile (with less than US$30M investment) can make an amazing impact in fostering entrepreneurship and startup community. It’s not about money, it’s about the Ecosystem.

Related post: Let’s learn from the Angry Birds

Let’s Learn From Chile#1

In April 2012 the government and the parliament agreed on a new law to establish a new fund that invests in small and medium size enterprises. The fund objective is to support small businesses and to boost the economic development in Kuwait. The fund size was US$6 Billion!!! In May I asked one of my friends to provide me with the new law to read.

I found out, such as many others, that the law is flawed and if the government go ahead with this project it will waste its US$6 billion dollars without reaching it’s goals. So I decided to write a report and submit it to government officials. I got the report done by the 2nd week of June, but by then a political turbulence started here in Kuwait and there was no government anymore. So instead of sharing this report with the government I decided to share it here in the blog with everyone 🙂 The report is a 36 pages document and I think most of you will find it boring, so I’ll just share a small part of it (I’ll upload the full report in slideshare later). The part I want to share is a research I did in two countries: Chile and Finland. These two countries are an interesting two cases and they did an astonishing job in terms of creating a Startup Ecosystem.

Let’s start with Chile. Chile created something amazing called Startup Chile, watch this beautiful video explaining what they do:


Startup Chile:

Program description:

Provide US$40,000 of equity-free seed capital, and a temporary 1-year visa to develop their projects for six months, along with access to the most potent social and capital networks in the country.

Goal:

To convert Chile into the definitive innovation and entrepreneurial hub of Latin America by attracting the world’s best and brightest entrepreneurs to bootstrap their startups in Chile, and create the next US$1 billion company.

Established:

2010

Team:

Board members: 8 (4 global, 4 locals) (2 from Stanford University, 1 from HP) No. of Employees: 16

Results:

-320  Startups benefited from the program until the end of 2011
-630 apx. is the number of people that benefited from the program
-Teams represent 36 countries around the world
-Money spent on the startups = Only US$12.8M!!! (To you still think we need US$6 Billion)
-Total funds raised by some of the startups = US$5M (outside investors)

-More than 20% of startups in the program are local startups

Also watch how the Chilean President treated the entrepreneurs like HEROS. (I hope you understand Spanish)

In the next post we will discuss the advantages and challenges facing Startup Chile and the Chilean Ecosystem, and what can we learn from them based on Steve Blank’s visit in 2011.

 

Update: click here to read Let’s Learn from Chile part#2

Interview with Maachla.com Co-Founder

Today we are starting something different. Previously we used to write about startups in Kuwait in general manner and without going into details. Today we will start something new, we will sit with the founders and chat a bit about their startups and their experience as entrepreneurs.

Our first interview is with one of Maachla.com  co-founders, Osama Alothman.

1.What is Maachla?

Maachla is an online supermarket based in Kuwait.

2.How and when it all started?

It all started when we found out that most supermarkets in Kuwait don’t have a home delivery service nor an online presence, so in 2008 we decided to solve this problem through an online platform called Maachla (Maachla in Kuwaiti means the stuff you buy from the supermarket). Basically, we started as an online sales channel and a home delivery solution for supermarkets, however this model has changed later (more about that in questions#7).

3.How does Machla differentiate it self from other online grocery  delivery websites?
4.How big was your  founding team when you first started? and how big is it right now?

We started as 5 co-founders (Rashed Khazal, Bader Alrujaib, Mohammad Albahar, Ahmad Khazal and I), however only 3 are considered active on the day-to-day operations, the other 2 co-founders are more like an active investors, they are involved in making some major decisions. So we started as 5, then we added 7 more employees (both as drivers and on-sight operation) when we got our first partnership deal. Now we have 22 employees in addition to the 5 co-founders.

5.How did you fund your project?

From our own pockets, now the startup is running on it’s own cash flow.

6.Who was responsible of developing the product/website?

We started developing the website with a website development company, later we recruited the guy who developed our website as a full-time employee.

7.Did the idea or business model changed (Pivot) during the 4 years of operation? 

Yes, we made one major change (pivot) to our business model. Our first business model was to work with supermarkets as partners, but we found out that this model doesn’t work because in Kuwait the board running the supermarket changes every year (in Kuwait supermarkets are owned by the residence of the city and managed by a board of members elected every year). And when the new board arrives, many things changes that usually affect our business substantially. We decided to make a major change and go with a new business model. Now we are literally an online supermarket, we have our own inventory warehouses and sometimes our own branded products.

8. Who works full-time in the company? 

All of the co-founders are working part-time. We recruited a CEO to follow the day-to-day operation. We were more involved in the early days, now we just need to followup.

9. How long it took you to move from the concept idea to launching the website live?

Around 18 months

10. How do you split roles and work load between founders?

We split roles into three parts: Operation, Technical and Marketing. Each one of us (the 3 active founders) was responsible of one of these departments. I’m in charge of the operation department and I take most of the major decisions by my-self except for special major decisions.

11. How do you manage your time between your daily job, your startup and your personal life?

Having a full-time job and being married are defiantly affecting the time and effort I’m giving to Maachla. It’s very difficult to give 100% if you have a daily job. I encourage people to quit their daily jobs after 1-2 yrs of establishing their startup and focus 100% on it. Or better to focus 100% on it from the beginning. You need a lot of courage to quit your job, but this what it takes to build a great company.

12.What you’ll say the major difficulties starting an online business in Kuwait?
  • Establishing and creating the company took us around 6 months!!!
  • Getting permissions to recruit employees from outside Kuwait
13.What type of things you learnt from working in Maachla.com that you’ll never learn from your full-time job?

I’ll say meeting and dealing with huge companies and experienced people. Maachla gave me the opportunity to create an amazing professional network. Also I’m dealing with many huge companies that applies high quality standards when dealing with customers, logistics, employees, marketing and managment. I’m learning a lot from working with these type of companies in a daily basis.

14. Do you have any advice for someone that is considering to start their business?
  • Yes, having 5 co-founders in a startup is a lot. Try to start in a 2-3 co-founders team. It’s much easier to move and make decisions.
  • You need to work in your startup everyday, at least in the first 1-2 years of your business.
You can find more about maachla in this TV interview, also you can follow Osamah in twitter at @oalothman and maachla at @maachla .

(Disclosure: Osamah is also one of my best friends 🙂 )

That was our first founder interview. I hope you found it useful, but I feel the questions still can be much improved. Please leave a comment or send me an email if you have any suggestions on the questions that I should add next time. Also please contact me if you are a founder or if you know a founder of a Kuwaiti startup, I’m very interested to get in touch with them and conduct a similar interview. (you can send me an email at startupq8@gmail.com or find me in twitter @a_alshalabi)
One last thing, I need some help with doing these interviews that I wish we can do more often, if you are interested to offer me some help, also please contact me at startupq8@gmail.com.
%d bloggers like this: