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‘‘How much would you pay me for an idea in my head?’’ SME Connect explores the technology start-up ecosystem in Qatar – what’s working, what’s lacking and where is it going? By Ayswarya Murthy
SME CONNECT | ISSUE 1
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country, even one as small as Qatar, can be characterised by various diversitiestraditions vs. modernisation, fundamentalism vs. moderation, conformity vs. individualism or you vs me. But there are times when a national goal takes precedence over everything else and everyone can associate with it. These are the times that bring citizens together and instil pride, focus and, determination in each individual. The space race of the 1960s did that for the Americans. For Qatar, it will be the drive towards a knowledge-based economy. This implies encouraging and investing in innovations, bringing about a change to the traditional business mindsets and most importantly, letting ideas take flight. All this can be achieved by empowering small and medium enterprises (SMEs) since every new enterprise starts small. While Qatar is trying to shake off its “trader mentality” and take a giant leap into the new age, there is a long road ahead. A survey by Silatech and Gallup last year revealed that one in three Qatari
“Qatar is providing one of the best possible environments for such technology establishments on all levels.” Naim Yazbeck Country Manager, Microsoft Qatar
nationals (33%) in the age group of 15-29 want to start a business in the next 12 months- the highest percentage in the Arab world, where the median is 9%. A testament to this is Abdullatif Al Kuwari who wants to equip taxis in Doha with tablets, providing passengers with helpful and engaging "infotainment". He, along with his team stood second at the Startup Weekend competition last December. Interestingly, he is an 11th grade student. “Right now our plans are on hold. The fact that we are underage is kicking up funding and legal issues,” he says, “We are just waiting to turn 18...” The great Qatar start-up story Luckily for Al Kuwari and others like him, there is a tangible, albeit slow, change in the way tech startups are being perceived in the country. ictQATAR, QSTP, Silatech, Enterprise Qatar, Microsoft and others are leading the way in improving the ecosystem and making it more conducive for young innovators to convert their ideas 26
into businesses. One one hand, networks are being built from the scratch. Furthermore, mentoring and advice is enthusiastically given and received. Today, there are regular events organised by the Enterprise Qatar, Bedaya Center and Roudha Center to bring entrepreneurs together to discuss their common challenges and how they are working their way around them. Start-up competitions are a dime a dozen - 3 Day Startup, MIT Enterprise Forum Arab Startup Competition, Al Fikra, Startup Weekend, Injaz. Winners take away more that cash money; the associated visibility, connections and support that come with mere participation, is invaluable to new entrepreneurs. Incubation centres like the ones in ictQATAR, QSTP and Qatar Business Incubator are supporting young companies through their turbulent initial stages. Financiers are being coxed and coerced into putting the money on start-ups. The sun is rising in the horizon. “I believe that Qatar is providing one of the best possible environments for such technology establishments on all levels. Earlier this year, Microsoft Qatar entered a partnership with ictQATAR and Silatech to develop and deploy weband mobile-based employability portals across the Arab region – “Ta3mal” – which aims to provide new jobs and entrepreneurship opportunities to over a million young people throughout the Arab World over the next five years,” says Naim Yazbeck, Country Manager of Microsoft Qatar. Even with all this, it’s a tough uphill battle. Diana Al Dajani, who runs edutechnoz.com, a website for children that teaches Arabic in a fun, interactive manner, is a one-woman army. Barely a few months after she emerged runner up at Enterprise Qatar’s Al Fikra Competition and the winner of the Best of Entrepreneur award at MITEF, Al Dajani has re-launched her website (which till now was running the beta version), added new features and expanded to the other regions of the GCC. “The prize money definitely helped. And I actually met a mentor at one of these events who was keen on helping me expand in the UAE,” said Al Dajani. The press coverage and subsequent attention from private financiers didn’t hurt either. “The exposure opened so many new doors for me,” she added. Though Al Dajani is doing just fine, being part of an incubator would have helped her immensely. “When I apply for an incubation programme and they ask me in my application what services I’d require, I am going to check all of them,” she laughs. “When you are a start-up, you have to take all the help you can get,” she noted. Razan Suliman, Founder of Bylens, was fortunately selected for incubation at ictQATAR. Her company focusses on the distribution and production of stock images and serves Qatar’s business network of both editorial and commercial clients. Being the only online stock photography website in Qatar (modelled on Shuttestock, Corbis images and the like), Bylens was a breadth of fresh air for companies using ran-
dom Arab images that had little connection with Qatar. “Most online photo libraries are with Emirati models and the difference between a Qatari thoub and Emirati thoub is huge,” she observed. So Suliman came up with a great idea and the incubation centre supplied the rest – accounting, legal and logistical aid, funding, internet, space... whatever is needed. Despite this, Suliman says that the fear of instability didn’t pass for a long time. “The lack of revenue and not knowing whether we would be able to make ends meet was debilitating,” she said. And the negative attitude of those surrounding her only exasperated things. “At first people thought it won’t work and there was no place for such a business. So we kept company with people who would support us whether our business succeeded or failed. This gave us the room to build a business without worrying about what our peers were thinking.” Just imagine battling these kinds of odds without the “village of support systems” that an incubator provides. Taking the plunge is scary enough with people around you not believing in you and your ideas. So, though there are pockets of individual and entities trying to speed up the evolution of how we think about businesses, it’s a lopsided battle against the forces of the old world that are unfamiliar and unreceptive to the intangible nature of tech enterprises. It’s a two-way street The biggest gripe among potential tech czars in that funding is not easy to procure in the country. It is hard to imagine that in a country like Qatar, with abundance of wealth and the highest per capita GDP in the world, that something as pedestrian as money would be a problem. Ironically, it is. “Lenders here are very conservative and don’t really understand service. Loans are easy enough to come by when your products are tangible, but if they are not, then be ready to fund your business from your own pocket,” said Nabil bin Aissa, founder and CEO of QPay, a payment processing firm. There is no denying that the angel investor and venture capital culture in Qatar is premature. Largely used to “lifestyle entrepreneurship”, fundamentally based on trading, the community is still struggling to understand “innovative entrepreneurship”, even on the policy level. The law that a new entrepreneur must lock in QR200,000 to start a new business is one such glaring example. It, sadly, is not a big surprise that Khalid Aboujassoum claims that his biggest challenge in getting his company off the ground, was changing the mindsets. “Investors don’t understand how you can start a business with just an idea and QR200 or QR2000,” said Aboujassoum, the founder of ibTEChar and the winner of the first Qatari Stars of Science. He also added that the new generation of entrepreneurs is burdened with creating awareness and communicating the value of
“Every small decision I take carries the weight of extensive research that went into making it.” Diana Al Dajani Founder, Edutechnoz
institutional knowledge. Aboujassoum, undoubtedly, is the poster boy of the young entrepreneurs in Qatar – articulate, level-headed and clear-thinking. His brainchild, ibTECHar, aims to integrate technology into education. “Today’s classroom is the same as the classroom our parents and grandparents studied in. We want to revisit the system and see if there are better ways to deliver information using technology. And this is not about just putting an iPad in front of every student,” said Aboujassoum. After winning the QITCOM Innovation Competition, his company was selected for incubation by ictQATAR, one of the first companies to be part of the programme. Today, there are at least a dozen other companies sharing office space with him. He is close to the end of the two-year programme and he says it has been a fruitful partnership. “We are all growing together,” he observed. He further added, “ictQATAR gave us resources and support and in turn they learnt from us first-hand how small tech companies work. They are starting to realise the potential of knowledge-driven enterprises and the huge role they are going to play in the economy we have envisioned for the future and the Qatar National Vision 2030.” However, he admits that a lot more needs to be done adding that it
“We kept company with people who would support us whether we succeeded or failed. This gave us the room to build a business without worrying about what our peers were thinking.” Razan Suliman Co-Founder, Bylens
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“Investors here don't understand how you can start a business with just an idea and QR2,000.” Khalid Aboujassoum Founder, ibTECHar
needs collaboration from all the stakeholders. “But entrepreneurs first have to start creating value for the funding agencies to understand it,” he said explaining the vicious circle. “Young innovators complain about lack of channels of funding or helpful policy while hesitating to take the first step. These bottlenecks hold them back and they do nothing. Investors in turn say ‘you have just been shouting about receiving no help; show me what you have done first’. It’s a paradox involving both parties where everybody loses.” His solution: Put in the effort and someone will notice. “If you really believe in your idea, take some time off work. Cut down on vacation. Create something. And people will see. Money comes with value creation. It’s been done before. You are not reinventing the wheel,” he said. Al Dajani is a shining example of this principle. When Al Dajani was asked how, as an entrepreneur, is she innovating her business practices, she said that she always focuses on minimising price tags at every turn. To do so, she always tests everything on a small scale before rolling out the development or the project. "I always dip my toes in the water before jumping in," she says. Also, she often had to get "greasy" (i.e. being able to do it yourself ) to keep the business alive. "When outsourced developers or interns couldnít complete the job on time, 28
or when they would charge beyond the budget for developing a specific task, I would finish the coding myself (thanks to my background in computer engineering)." When it comes to business development and sales, Diana innovates, by partnering with agents in different parts of GCC, MENA and Europe. "The decision to go with commission-based relationship with agents made the most business sense where expanding investments are being minimised by utilizing agentsí current staff (Sales and Support) and customer base in their assigned territories. Every small decision carries the weight of extensive research, mentoring, learning and guts that went into making it." The changing tide Aboujassoum says that the change is taking place at every level – grassroots to government. Some of the antiquated practices might get some respite with the passing of the new Commercial Law which is under review at the Council of Ministers. “You’d no longer have to show funds of over QR200,000 if this bill passes,” he said. “Taking into account Qatar’s economic history, the fact that such a law exists is understandable but people at the policy level now realise that this has to go,” he added. Entrepreneurs too are showing great initiatives, they are braving the odds and grabbing at any and all the straws, signing up for online support systems such as BizSpark and Keep Your Business Moving. “Bizspark provides software, support, visibility and networking opportunities to more than 50,000 entrepreneurs and business startups in over 100 countries,” says Yazbeck, adding that Microsoft is now also offering ‘Office 365’, that allows small and medium businesses to utilise advanced cloud-based, cost-efficient software, free of charge to any NGO in Qatar. “Moreover, many schools and universities already have designed programmes to support their students’ ambitions, like the CNAQ, VCU-Q, among others.” For Qatar’s nascent entrepreneurial community, the tide is undoubtedly turning in its favour.