Failure: The Cornerstone of a Successful Startup Community

This article appeared in Khaleejesque Magazine, ECONOMICS Issue, published March, 2015. A PDF copy of the article is available here. It is published on this blog with the consent of the author and magazine. All credits and copyrights are reserved to Khaleejesque, 2015. Click here to subscribe to Khaleejesque, or follow them on Instagram @Khaleejesque 

Author: Hashim Bahbahani

Print Artwork: Khaleejesque Team

4 min read.

I paused momentarily as I stood outside the meeting room, took a deep breath, tightened my left hand grip on my laptop briefcase, exhaled, and slowly turned the door handle to enter what I knew would be the last-ever meeting for our startup. There was only one item on the agenda: shutting down.

Even as I took my seat at the meeting table and drew a sip out of what seemed to be the blandest cup of coffee I have ever tasted, I thought one more time about reversing my decision to end our startup venture. In truth, I had spent more than a month agonizing over this decision. I fully understood the cold facts: our e-commerce platform for small businesses was not gaining enough traction or engagement, we were out of money, and we had little to show for after three years of trial and error.

But I also understood that shutting down our startup meant that I had to publicly admit failure and live with all the ramifications such an admission entailed. That, above all, was my source of agony.

In the Gulf region, thousands of startups founded by ambitious entrepreneurs have to deal with facing failure. Failure, after all, is the more likely scenario for a startup, statistically speaking.  This fact is fully embraced in developed startup ecosystems, where failure is celebrated and thought of as a rite of passage for entrepreneurs. In Silicon Valley, for example, “Fail Fast” is a divine mantra meant to encourage startups to rapidly try everything possible to make an idea successful, admit failure if it doesn’t work, learn from the experience, and take those lessons forward to the next venture.

This definition is a stark contrast to how failure is perceived in the Gulf region. Abdullah Asiri, founder and CEO of Saudi based startups ShopMate and Waqood Tech, remarks: “In global tech hubs, true failure is defined as stopping after the first unsuccessful try. If you don’t learn from the lessons of your first experience and apply them to the next startup (or the one after that), it renders the first attempt pointless. In mature startup economies, there is a lot of encouragement to openly discuss your failure in order to dissect it and learn as much as possible from it, and then try again.”

Asiri believes this encouragement is absent in the Gulf startup scene because there is a heavy punishment for failure.

“Here (in the GCC), it is very difficult for entrepreneurs to try again in a new startup because the backlash they confront from society after their first failure makes it unbearable to take another chance and risk facing such societal pressure again,” Asiri continues. “Moreover, investors here become much less inclined to invest with you if you have previous failures. In short, this pressure and punishment inhibit an unsuccessful attempt from becoming a learning experience. It makes failure permanent.”

Asiri’s comment on investor behavior in the Gulf region is critical. Venture Capital (capital invested in new or expanding businesses in which there is substantial risk) is the bloodline of any startup ecosystem. While society plays an important role in encouraging a tolerance of failure, venture capitalists (VC’s) and angel investors (an individual investor who invests in high risk, high growth businesses) have the biggest impact. If investors refuse to invest in a startup because of the past failures of its founders, then those investors are tangibly punishing failure.

In order to further understand how investors in the GCC, both corporate and individual, react to past failures from entrepreneurs, I spoke with Mona Al-Mukhaizeem, co-founder of Kuwaiti startup accelerator Sirdab Lab, and an angel investor herself.

“Investors in the Gulf are accustomed to low risk investments, such as real estate or debt bonds. They have limited tolerance for failure,” Al-Mukhaizeem remarked. “A strong Venture Capital firm or angel investor must possess a different mentality; one that is more realistic about the risk of failure for startups. Without such investor mentality, capital will never flow into the GCC startup economy.”

However, Al-Mukhaizeem, who has experience with VC’s in Silicon Valley, believes that there’s a gradual shift in the way investors in the region evaluate startups: “There is a new breed of angel investors and VC’s in the Gulf region who understand that nine times out of ten startups will fail. But the impact and reward from that one successful startup more than makes up for the shortcomings of those unsuccessful ventures.  Thus, this new generation of investors is willing to give promising startup teams multiple chances to succeed. It’s a very important change towards building a successful startup community.”

Al-Mukhaizeem has also noticed through her heavy involvement in Sirdab Lab and the GCC startup scene that founders who fail are finding more support and encouragement.

“In the past, we saw founders clinging on to floundering startups because they did not want to be portrayed as failures by their friends, family, and peers. However, as a sense of community and togetherness fosters in the startup community, more people are sharing their experiences with failed businesses. An optimal learning curve is only achievable if entrepreneurs have the chance to learn from their own mistakes, as well as the mistakes of others,” concluded Al-Mukhaizeem.

Fundamentally, startups are experiments of innovation. As is the nature of innovation, there must be multiple attempts before success is realized. For multiple attempts to occur, society, investors, and entrepreneurs have to perceive failure as a step in the learning ladder. As the Gulf community gradually shifts towards a “fail well, fail fast, try again” mentality, a more impactful and inventive startup community will thrive. Lest we forget, Edison burnt a thousand light bulbs before one finally lit up the world.

This article appeared in Khaleejesque Magazine, ECONOMICS Issue, published March, 2015. A PDF copy of the article is available here. It is published on this blog with the consent of the author and magazine. All credits and copyrights are reserved to Khaleejesque, 2015. Click here to subscribe to Khaleejesque, or follow them on Instagram @Khaleejesque 

New Blog in Town

There is a new blog in the block called beopen.me. Its a mix of news (Tech and non-tech) and thought sharing platform in Arabic and English started by a good friend Ali Al Nusif and his co-founder Jasim Al Qames. Below is a better description about what the blog is about by Ali:

Open is an open blogging and aggregation bi-lingual thought platform. It aims to bring interesting thoughts from individual contributors to create thought provoking conversations among the connected generation, while also bringing interesting articles from all over the world that caters to the interests of the smart reader providing insight and context to a lot of issues happening around us in the world.
The idea came about while noticing that there is no platform that chronicles the interests and thoughts of the connected generation in the Arab world. Websites are usually news and politics websites, while there are hardly any that talk about how we feel, think, and what our interests are.
We believe that we’re going through exciting times. We are living the information revolution that is changing our lives in one of the most vibrant and changing parts of the world; the Middle East. We think that a platform like Open would allow us to capture the essence of this amazing era through the thoughts and interests of its generation.

Why you need a cofounder (a personal story)

I’d like to share a personal story about how it took me 3 years to start Sirdab Lab.

While doing my MBA in San Francisco, I got a chance to work closely with startups in an amazing accelerator program. I fell in love with the energy of the people and the fast progress they were making in short time periods.

I decided that I want to start something similar in Kuwait. When I came back to Kuwait I spoke to one of my smartest friends, who was also interested in startups, and convinced him to work together on this. It took us a year of planning, but we didn’t move forward. I think the reason for this is that we came from the same professional background.

I joined Ernst & Young (EY) and almost gave up on starting Sirdab Lab. Then I met Abdullah Al-Sayer, founder of MrBabu.com, at Thukhur. My interest in working with startups rekindled, but it remained a passion without action.

In the 2014 Benchmark Forum I met Haider Al-Mosawi, a UX designer, who shared my passion for helping startups and providing the community with comprehensive support. We shared the same vision and spotted the same problems.

I asked Abdullah and Haider to join me as cofounders in building Sirdab Lab as a startup hub in Kuwait. They both agreed, and we started to execute on that vision. Each of the cofounders has unique skills that complement one another.

Being a startup founder is insanely demanding and incredibly stressful. It’s almost impossible to get started on your own, let alone building your startup and seeing it through to success. Most accelerator programs only accept startups with a minimum of two cofounders, because they know how hard it is for solopreneurs and it’s too risky to invest in them.

So if you’re serious about your startup, you need a cofounder. Don’t have one? Then I highly recommend you join our Co-Founder Speed Dating event this Wednesday. Follow the link below for more details.

http://sirdab-lab.com/speeddating

With the Co-Founder Speed Dating event, the first in Kuwait, Sirdab Lab aims to provide a platform to connect entrepreneurs and people with talent (designers, coders, hustlers) through smart and efficient networking.

How does it work?

Entrepreneurs will be seated at tables arranged in a circular setting while people with talent (designers, hustlers, coders) rotate. Each entrepreneur and person with talent will have 3 minutes to introduce themselves and pitch their idea and skills to each other. Once the buzzer rings, the person with talent moves to the next entrepreneur.The speed dating will be followed by mingling over snacks.

When?

6:30 PM, Wednesday

18th March, 2015

Entry Fee (includes food and beverages)

Sirdab Lab members: KD 8

Non-members: KD 10

Where do I sign up?

To register, please visit: http://sirdab-lab.com/speeddating

“How is business going?”

Almost every day I pump into someone (a friend, a fellow entrepreneur, someone I don’t even know) and they ask me “how is business going?”. It’s a very tricky question to ask for a startup founder. Things at a startup are 90% of the time going bad. I used to hide from my parents to avoid answering this question!

So how to answer this question?

99% of the answers I get if I personally asked this question to another founder “very well” or “Great!”, then after few months I hear that the startup is shutting down!!  I used to do the same, my answer was always “great” but now I changed. My answer depends on who is asking me the question.

If an entrepreneur is asking me then I tell the truth as it is, I usually answer “it sucks” at difficult times. You need to understand that a founder will actually not be happy to know that you are doing great while his startup is falling apart. Even if your startup is doing amazing and the founder of a startup that is doing bad asks you “how is business” tell him “is doing ok”.

Its a tough life and we as entrepreneurs only have each other to talk to because the rest of the world just don’t get how difficult our life is. If you said you are doing fantastic then the conversation is stopped here and the person will do the same and the conversion is done. But if you said “trying to stay alive” the conversation will be different and he will probably say “same here” and you will start talking about your struggles, at least you’ll not feel lonely.

As I said my reply depends on who I’m talking to, below some examples:
My parents: Very good
Non-entrepreneur friends: all good, we did this and we did that, things are very promising
Investors: amazing, soon will be millionaires
Startup founders: sucks, surviving, trying to stay alive, ok, not bad

Next time a fellow entrepreneur asks you how is things, its ok to tell him that things are pretty bad, you’ll both feel good about it.

Most events are a waste of time!

As you might know, I’m now living in Dubai and there are tons of events for startups every week and almost in a daily basis. To be honest most of the events are a waste of time. Focus in building your business better than you go to events. The worst events (aka conferences) are the ones that you need to travel to go to them. Such a big waste of time and money! Especially the ones that convince you that you’ll find investors, pitch your idea and give you a booth to meet media and PR. These events are now everywhere around the world and most of them are just waste of time and a big distraction.

It’s rare to find an event were I learn something useful that I can use in real life. Most of them have a fancy title and when you go you find the talk is pretty general and you end up learning nothing!

Of course not all events are a waste of time, especially if you know what you want to take out of them. For example Mix N Mentor from Wamda is pretty good, especially if you are a new startup. It’s a good opportunity to meet interesting people that might help you with your startup and great way to find mentors and advisors. If you are going to a talk about for example SEO, and the speaker is super amazing then yeah maybe you can learn something there. Or if the event is a great way to find customers, then hell yeah, you probably should attend. Heavy technical events are pretty good as well if you are looking for a technical co-founder or a potential hire.

One more example when events become useful is when you are in a new city or town and you need to build your network quickly, then yeah events are pretty useful. Go to as many as you can until the faces get repeated then you know that you have a good network and you can stop going to them.

I’m saying that and I’m the founder of StartupQ8 Event, so controversial right! Well, if you are a startup and between attending the event and working on your startup, then I’d recommend you check what is the subject of the event and who are the speakers. If it’s not interesting enough then don’t come, no issues, we understand that you should focus in your startup. It’s a challenge for us, we need to make the content of the event super useful so that it is worth your time. Moreover, we are very sensitive to time, if you are a regular StartupQ8 attendee you’ll realize we always start on time and finish on time even if Obama is going to speak at our event!

In short, events are over rated and sucks most of the time; don’t go to them unless you know exactly what you want to get out of them.

If you disagree please write in the comments, will love to hear your feedback 🙂

UX Designer Responsibilities (Part 1) – Intro to User Experience

This is a post by our new contributor Mahmoud Ilyan. Mahmoud is a UX designer I met when he was working with CarpoolArabia.com in Dubai. He has a good eye for UX/UI and most importantly he understands people and the latest technology that makes the user experience better. At the end of the post you’ll find more personal info about him. Welcome Mahmoud! 

 

In recent years the demand for UX designers has increased, and its still increasing more and more, companies are putting more attention to it.

Why it is so important?

Back in the early days of software market engineers and product managers were taught to believe that the full features software is the sign that the software is worth to buy which will make features a competitive advantage between softwares available in the market, this was true because there weren’t so many people putting software products on the market, which will leave the user with no choice only to use the complex product that is available now.

However, time has changed and the software products market has grown which make the user want to choose between so many products with the same features, and because of that people don’t want to learn how to use complex products and they are always after the simplest and intuitive solution.

Take a look at some of the large companies now like Apple, Samsung,  Facebook, Google, Microsoft, …the main competitive advantage between them is the Customer’s User Experience.

What is User Experience and what goes into user experience?

how much joy of use I would get while I am checking my email in my smartphone?, and did I reach my goal to save more money after using my online saas accounting service,… all these kinds of questions the UX designer would play a role in answering them, so lets take a more deep look in the UX definition and what are the components of it.

User Experience: is the totality of the effect or effects felt by a user as a result of interaction with, and the usage context of a system, device, or product, including the influence of usability,usefulness, and emotional impact during interaction and savoring the memory after interaction.

as you can see from the definition above user experience is more than usability, usability factors such as ease of use,efficiency and learnability are still very important in all products but are not enough.

Usability, Usefulness, Functionality, and Emotional Impact are components of user experience and should be considered by the user experience designer from his first day working on building the product, and for more clarity lets take a look at each of them and then go to the process of user experience design.

Usability: The pragmatic component of user experience including effectiveness, efficiency,productivity, ease-of-use, learnability, retainability, and the pragmatic aspects of user satisfaction.

Usefulness: The component of user experience to which system functionality gives the ability to use the system or product to accomplish the  goals.

Functionality:  The power to do work seated in the non-user-interface computational features and capabilities.

Emotional Impact: Affective component of user experience that influence user feelings, and it includes such effects as pleasure, fun, joy of use, aesthetic, desirability,..etc and appeal and can involve deeper emotional factors such as self-expression, self-identity, a feeling of contribution to the world and pride of ownership.

Professional User Experience designer consider in their mind while they’re working these components, but what is the process and guidelines for ensuring this.

UX Process

UX Process

 

In the figure above you will see five steps to release the MVP (Minimum Viable Product) or first release and the other steps (6,7) are for refining the product.

In the next articles of this series I will explain how to implement each step and what is the goal to achieve from each step.

Mahmoud is a UI-UX Designer & Front-end web developer from Palestine. He turns ideas and complex problems into products that are simple and pleasurable to use, He also works as an outsourcing partner to companies across the globe. 
Mahmoud is also interested in Entrepreneurship, Startups, Innovation,Philosophy, Music and Swimming.
His social accounts:
linkedin: ae.linkedin.com/in/mahmoudilyan

Should you move to Dubai? Think of this first

Many startup founders ask me this question “Should we move to Dubai?” I get it from startups not only in Kuwait, but all over the Middle East, especially since Dubai is now considered the business and innovation hub in the Middle East. Well the answer is not straight forward. For some startups it makes sense to move right away, for others later and for some maybe never.

To be able to answer this question, you need first to know what type of startup you are:

  • Pure technology startup (example Google, Facebook, Soundcloud, Youtube…etc)
  • Games Startup (Angry birds, Zynga, Dwanya Labs)
  • Software as a Service SAAS (Zendesk, Dropbox, Basecamp)
  • Marketplace (Airbnb, Uber, Fishfishme, Booking…etc)
  • E-commerce (Amazon, Zappos, NetaPorter)

1- Pure Technology, Games and SAAS startups:

For each type of startup you need to be close to different type of people and resources. For pure technology, Games and SAAS startups the most important asset is your programmers, engineers and designers. Basically you need to be close to talented people.

 

2- Marketplace startups:

If you are a marketplace (connecting buyers to sellers) similar to us you need to be close to your customers and suppliers. Your startup is a balance between business and technology. However, your suppliers is your real product and you need to be close to them and you need to be close to your customers to make sure they are delivered what they are promised. That’s especially true if you are selling an offline product or service such as Talabat.com. It’s less true if you are a marketplace for a digital service such as Odesk.

 

3- Ecommerce Startups:

For ecommerce startups it becomes very important to handle logistics, inventory and fulfillment. It’s important to have good relation with your suppliers and carrier services. It’s also important to master marketing since the products you are offering it’s most likely provided by many other websites. For Ecommerce websites, you probably need to be close to your customers and to have warehouses closer to them.

Now after you identified in which category you fall then you can make a better decision. Now let’s talk about the advantages and disadvantages of Dubai for a startup:

Advantages:

  • Easier to start a business, register a company and get a visa
  • Very diversified population. If you can make it in Dubai, you most likely can go global and make it in another places.
  • All businesses have head quarters in Dubai. If you are a B2B business you should be here
  • Last year 10M tourists visited Dubai. Very good for travel related startups
  • Talented people are here. The most talented people in the Middle East lives in Dubai. Here dreams become true
  • There are incubators and accelerators.
  • Some startups made it big here (Dubizzle and Zawya)
  • Most famous investors are either based here or visit Dubai in a regular basis.
  • You’ll be away from the social pressure and your family telling you everyday to quit your startup and go back to a regular job at a big company and get married
  • Here you meet (sometimes) some interesting people that you’d never meet at any other place in the Middle East

Disadvantages:

  • So expensive to live. Really really expensive!
  • Talented people have many options and opportunities to join other startups or companies

I can’t think of other disadvantages. Dubai is so expensive and it’s probably the only reason you should think twice before moving here. Dubai will burn you alive. Office rent, salaries, living expenses you name it, it’s very expensive. If you are a new startup and you move here without raising money then you’ll most probably close in a short period of time, faster than you’d do in your home country. Startups need time and you can buy time with money. Money burns very fast here and so does startups. The life of your startup is much shorter here. I see this happen a lot since I moved here 2 years ago. There is only two startups that survived at In5 since I moved in 2013 that’s us (fishfishme.com) and Snappcard.com. Probably 30 other startups are all shutdown (sorry if there are startups that are still live and I forgot about them).. Why? Because of the expensive life.

For some startups it makes sense to have most of your team in one place and your sales team in Dubai. This is what many startups are doing to save money, and they are doing it the right way.

Don’t move to Dubai to raise money. Don’t move to Dubai because registering a company and paper work is easier here. Don’t move to Dubai because you love living here. If you have traction and customers, investors will find you wherever you are. Find what type of startup you are and who should you be close too, then decide if you should move or not.

If you have any questions about dubai send me a direct message in twitter @a_alshalabi.

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