The East Wing Gallery was hosting an exhibition of works from the series „The Other Hundred – Entrepreneurs.“ The collection, initiated by the Global Institute for Tomorrow (GIFT), aims to provide a counterpoint to the various top 100 lists of famous and infamous people that are published by different magazines, most notably Forbes. Instead of focusing on high profile entrepreneurs that often are – or at least seem – to be detached from the realities the majority of mankind is facing, GIFT wants to look at the many forms of activities and ideas that people all over the world bring to life in order to make a living or the world a better place. While still not representative, the photos – and the stories behind them – provide a much better view on what entrepreneurship means. In connection with the exhibition, the East Wing Gallery was also organizing two „conversations on entrepreneurship.“ The first one took place Oct 3, 2015 and the second one week later. This post is a collection of thoughts from the first talk, not a complete summary. If you’re interested in the full event, you can find a (mediocre) audio recording here.
Zaina and Rania Kana’an – Charicycles & Ananasa.com
The evening was off to a great start with the two sisters behind Charicycles & Ananasa.com who pointed out that the region (whereas „region“ means GCC & Levant) lives almost completely off imports. This is true for goods as well as (startup) ideas and, even though not mentioned, people. In order to change that they decided to start Charicycles and bring production at least partially to the UAE. The bikes they sell are based on used frames imported from Japan and locally enhanced. Asked about challenges specific to the region, the sisters brought up three points:
- Their main experience from Ananasa (basically the Etsy of the Middle East) relates to the Levant region, a part of the world that recently has been and still is busy taking care of various revolutions, civil war and millions of refugees. Because Ananasa is a peer to peer marketplace, there are many 3rd parties involved that the sisters had little control over. Given the circumstances they felt that many of their suppliers showed a lack of commitment, although they clarified that this was often due to circumstances beyond anyone’s control.
- In relation to the GCC countries, the biggest problem they experienced is the high cost of starting a business (more on that later)
- With Charicycles being a social enterprise – the company donates one bicycle to refugee camps for each 5 bikes sold – they were also facing the issue that the concept of social entrepreneurship is not well understood in the region. Authorities here only know for-profit businesses and charity. I’m not sure why exactly this is a problem though, as the only benefit of specialized regulation I can see is tax benefits. Those hardly apply if there are only minimal taxes.
Another question was how to reduce the fear of failure that is very present here in the region. The sisters think that this can only be overcome little by little and by supporting people in one’s direct environment or starting something by oneself. I agree on this point – most people who are in a position to start a business here in the region will probably fall on a soft cushion, even if they fail, so that financial concerns hardly apply and it’s more a cultural problem that cannot be addressed through regulation (although it won’t hurt to make bounced checks a civil and not a criminal offense).
Ankur Shah – Careem
Next up was the CFO of Careem, the Uber of the Middle East. I’m not a big fan of either company, so I might be biased here. What he said felt very similar to what we here from the Silicon Valley. He believes that solving the problem of jobs is paramount and once this is done, other pressing issues will be solved. I already disagree on the notion that everybody needs a job – I believe people need to have sufficient (financial) means to live a decent life and also have a somewhat meaningful occupation to spend their time. I don’t think that the latter needs to be the source of the former. In Shah’s opinion we need to create an „infrastructure for opportunities,“ i.e. an environment of systems, expectations, beliefs and governance that supports the creation of jobs. With this goal in mind he joined Careem, aiming to make an impact on their suppliers‘ lives.
This sounds all nice, but I won’t believe it until Careem or Uber go public and can prove that they make money, actually provide a good opportunity for their drivers and can maintain the current rates & quality of service. The most interesting point Shah mentioned were considerations for over-the-top services that can be provided once a flexible and reliable transportation infrastructure is established. This could be things like delivery or cash collection, but traffic conditions and economic aspects will make sure that motor-cycles and not a Lexus will be used for this job in the Middle East.
Joana Bacallo – Agua Pura Natural
The last panel speaker was Joana Bacallo who founded Agua Pura Natural in her home country. Her business aims to provide clean and safe drinking water in an environment that doesn’t provide this basic commodity. Thanks to the flexibility and opportunities of her job as senior flight attendant she was able to participate in various water related events around the world. The understanding she gained from these conferences and her anger about how little changed in the recent years in some parts of the world, is what she describes as her main motivation to get the company going despite various regulatory and irregular hurdles and being based in Dubai. Similarly, she describes South East Asia as a great place for entrepreneurs because „things are in such a mess,“ many basic needs are often unfulfilled and provide ample opportunity to start a business and not just make a profit but also improve people’s lives.
I find this to be an interesting, new perspective. While the product might not seem as fancy as up-cycled bicycles, hand made goods, a limousine service or many of the other services that make it to the news, it can arguably have an even bigger impact on people’s lives at a much smaller scale.
David Moleshead – Envestors
While he didn’t get his own slot to present, David Moleshead was able to provide interesting insights from during the Q&A session. As an investor, he took a different side in the discussion and answered mainly two questions:
- Asked about the biggest region-specific challenges for entrepreneurs, he pointed out that the cost of starting a business here is much higher than in developed countries. Due to the absence of taxes and automated processes, every part of the registration process comes with a hefty fee. Legal requirements force you to either find a local business partner or work in a free zone – who will charge you accordingly. Matters are made worse by the fact that the funding infrastructure in the region is insufficient. There is hardly any venture capital available and while banks will happily sell you another loan as long you can provide a salary certificate, they shy away from funding new enterprises. In summary, even though running a business here may eventually be cheaper than in the western world, the high and front loaded cost is often prohibitiv to getting the business running in the first place.
- Another question was whether the UAE in general and Dubai specifically have good policies in place and execute them well in order to establish an entrepreneurial ecosystem. Moleshead pointed out that governments shouldn’t invest directly but instead should only facilitate external investments, for example through tax breaks or credits for investments in SMBs. The problem in the Middle East is that there can be no tax breaks where there is no tax to begin with.
Writing those lines I just now realized why I felt that Ankur Shah didn’t fit well into the discussion. Careem aims to grow a lot – to become big enough to be a local Uber competitor in the long term. This is fundamentally different from the idea of the series of „The Other Hundred“ – which specifically aims to avoid high profile figures and companies. While one could make the case that Shah’s goal of an „infrastructure of opportunities“ aims in this direction as well, I don’t see how this will happen anytime soon, given the current nationality specific visa & income situation in the Middle East.
Regardless of this, the evening was well worth attending because the discussion provided a great summary of the current situation of entrepreneurship in the UAE and the photos of the exhibition told some amazing stories.