Building Quiet Optimism at the Launch of the 5th MITEF Arab Business Plan Competition

As the 5^th round of the MIT Enterprise Forum Arab Business Plan Competition launched this past Thursday on Yas Island in Abu Dhabi, it set a new, sober tone for entrepreneurship in the region. Rather than laud past successes, speakers at the event discussed development in the region with stoicism and a sense of hard-won confidence. Those who had met with success emphasized hard work, perseverance, and dedication to the process. A genuine sense of solidarity in support of entrepreneurship took root in the room-- while entrepreneurs themselves received plenty of nuts-and-bolts advice.

H.E. Sheikh Nahyan bin Mubarak al Nahyan, Minister of Higher Education and Scientific Research and Chancellor of the Higher Colleges of Technology in the UAE, kicked off the event by emphasizing the transformative effect of the Arab Business Plan Competition. “With these innovative ideas in our midst,” he said, “how can we not move forward socially, economically, politically, and morally?”

Hala Fadel, the Chair of the MIT Enterprise Forum in the Pan-Arab region, affirmed the competition's commitment to growth, noting that support for entrepreneurs has expanded tremendously since the competition’s inception in 2007. But as young people in the crowd rustled in their seats, she quickly got to the point of why they should apply.

“First,” she said, “You’ll get started. Secondly, you’ll get trained by the top people in this region- it’s a science more than an art.“ And finally, she pointed out, “You’ll make contacts.” The room itself, packed with veteran entrepreneurs, investors, and consultants, testified to her statement.

Hala also shared three tips for success. “One, be passionate. The business plans that win are the ones that are presented with passion. Two, work very hard. I don’t know where the myth came from that you can run a business in this region by working from 9-2, but in my experience you have to work like a slave to succeed.” Finally, she said, “Don’t forget to say thank you to the people that have helped you.”

Building Infrastructure and Educating the Market

The first panel took an earnest look at issues the region faces. Panelists Sami Khoreibi of Environmena, Ihsan Jawad of Zawya, Marwan Chaar of FuGu Energy, and Elie Khoury of Dermandar answered the question: “Entrepreneurship in the Arab World: Are we good?”

Moderator Fred Sicre of Abraaj framed the talk by highlighting a crucial gap. “SMEs account for 70% of employment, but only for 30% of GDP in the region. In other parts of the world, you'll see more of 50/50 ratio of employment to GDP. What’s missing in terms of productivity?”

The universal answer? Infrastructure. The environment hasn’t always been supportive in the past, acknowledged Ihsan Jawad. “But we’re getting better at it. SME is now a very sexy word.”

Elie Khoury further elaborated on the challenges that a lack of infrastructure brings, likening creating an iPhone application with a Lebanese internet speed to training for a marathon in Kenya (video below). Once the proper infrastructure is in place, he reasoned, Arab developers will outpace everyone.

Sami Khoreibi discussed how entrepreneurs can build intellectual infrastructure becoming educators, especially when launching into nascent sectors. “We became a market leader by educating end users about the products, banks, and even our employees. We had to look abroad, bring in that talent pool, and train our employees.”

Further illustrating how entrepreneurs should empower themselves, Marwan Chaar pointed out the need to do your homework. “Here the market is 10 times smaller and 10 times more difficult than abroad. You should know your market well. With FuGu, we predicted ahead of time that the cost of electricity would rise. You should test, then invest: test your product in a smaller market to see if your model works, then seek investment.”

Elie Khoury closed the panel with a call to perseverance. “You have to fail 5 or 6 times before you succeed,” he asserted, to which investor sitting near me joked, “I certainly hope not.” Yet Khoury’s point drove home the panel’s point—success isn’t easy, but it is ultimately possible.

The Role of the Business Community in Societal Change

In an interlude between panels, we were treated to a juicy, pull-no-punches chat with entrepreneurial godfather Fadi Ghandour, CEO of Aramex, interviewed by Ali Jaber, the General Director of MBC Group, who is known for his unwillingness to spoonfeed the contenders on recent hit TV show Arabs Got Talent.

Ali got to the heart of a delicate issue: “One cannot help but notice the complete absence of the business community from the current societal change that is occurring.”

Not one to shy from candidness, Fadi acknowledged, “We are scared. We are scared of being at the forefront of change or development. We are stepping back and worrying that this attack on government institutions in the Arab World is touching us. But the business community [must] create its own independent wealth from governments… so that [it] becomes a force in civil society in the Arab World, and thus, part and parcel of the development process.”

Watch these two videos to see more of the interview; apologies for the shaky camera work.

Iterating and Persevering

The second panel featured a slew of past prize winners: Sherif Mostafa of PT Screen, Shadi Tabara of Capital Arabia, Omar Samra of Wild Guanabana, Rana Shmaitally of the Little Engineer, Hossam Maghoub of AlKharizamy Software. While they were only given a short time to describe their experiences, they all mentioned that entrepreneurs must be able to quickly iterate their approach, and persevere.

Sherif Mostafa urged that being flexible was critical. Shadi Tabara echoed the sentiment, noting that completely changed his plan as well as his industry once he entered the competition.

Rana Shmaitelly, now a well-known success, re-told what is now an iconic story of women’s entrepreneurship in the region: she started the robotics and engineering-focused summer program The Little Engineer in Lebanon to distract her son from electronic games. “In the beginning I invested from my own pocket,” she said, “and left everything in order to fulfill my dream.” But her success will empower others, she pointed out. “Today we won, but tomorrow we will invest in others.”

Omar Samra recounted leaving a stable career in finance to found the first carbon neutral company in the Middle East, advising entrepreneurs to get advice, but trust their instinct and insight most of all.

Touching upon the lessons of failure, Hossam Maghoub explained how choosing the wrong business partner brought a prior business crashing down, and yet inspired his idea to create an Arabic-optimized search engine, for which he won second place in the competition last year.

While each winner brought a different perspective to the stage, the primary qualities that the MITEF Arab Business Plan Competition had seemingly instilled in them were a humble submission to change and a newfound confidence in their ability to create.

The Power of Yalla

Habib Haddad, the creator of Yamli and new CEO of Wamda (and this writer’s boss), hopped on stage before the third panel, to discuss Wamda’s goals as an organization by entrepreneurs for entrepreneurs. He then gave three quick tips for business owners.

First, Listen to your customers, but then innovate on their behalf. Don’t just ask them what they want; create something new. Secondly, protect your cash flow. And thirdly, build a team around you that complements your skills. “Bear in mind, it’s going to be a rollercoaster,” he said.

Entrepreneurship is Psychological

As the third panel wrapped up the event, panelists Inas Khayal of the Masdar Institute, Neveen El-Tahri, of Egypt’s Delta Financial Investments, Adnan Sultan of Al-Qoudra Consultancy and Salam Yamout of the MIT Enterprise Forum of the Pan Arab Region brought the discussion into a broader realm as they discussed the ways in which entrepreneurship in the Arab World today is a psychological battle. Salam Yamout in particular stressed that Arab entrepreneurs need to get a new perspective and empower themselves to take risks and think bigger.

As Zaher Munajjed, Advisor to the President of Abdul Latif Jameel Co. gave the closing remarks, he did not paint an overly optimistic portrait of the challenges. “The entrepreneurial spirit shines as a beacon of hope in the Arab World's current bleak landscape. The challenges are daunting. Here we see a shining example of positive potent engagement.”

His comments closed the launch with a call to action. The quiet optimism that lingered was not simply thanks to the food and drinks waiting outside, but was built upon the images that speakers presented, of perseverance, flexibility, and commitment to forging ahead. With that mandate, we await the next batch of winners.