Young People in the Middle East Are Ready to Innovate
Lebanese entrepreneur Habib Haddad is one of the Middle East's biggest cheerleaders for the creation of a vibrant startup culture. As founder and CEO of Yamli.com, a search engine allowing users to type in Arabic without an Arabic keyboard, he has illustrated the region's vast potential.
Haddad, 30, has been at the center of the Arab world's rising ecosystem almost from the start. In 2005, he co-founded INLET, International Network of Lebanese Entrepreneurs and Technologists, which supports Arab-inspired entrepreneurship. He also formed Relief Lebanon, a grassroots campaign that aided Lebanese during and after the 2006 war between Israel and Hezbollah.
Haddad has a bachelor's degree in computer and communication engineering from the American University in Beirut and a master's in electrical engineering from the University of Southern California. In his latest enterprise, Haddad has turned his attention to budding mentorship programs in the Middle East and North Africa. In July, he took over Wamda, an Arab company aimed at fostering early stage entrepreneurship in the region by inspiring, empowering and investing in local entrepreneurs. It is supported by Abraaj Capital -- the powerhouse private equity group in the Middle East, North Africa and South Asia.
In an interview with Arabic Knowledge@Wharton, Haddad describes his vision to develop a homegrown ecosystem, the role of mentorship and the challenges faced by entrepreneurs in the region. Of Wamda, he says, "We are a startup organization empowering the startup ecosystem [in the region]."
An edited transcript of the conversation follows:
Arabic Knowledge@Wharton: Habib, you're an example of someone who returned home with quality education and experience when you started Yamli.com four years ago. Your journey offers insight into why you've launched your latest project with Wamda. Take us through some of the highlights.
Habib Haddad: First, there was no support of the ecosystem when I started. I couldn't find investors, I couldn't find engineers passionate about startups; I couldn't get press coverage. There was a social stigma with entrepreneurship.
Arabic Knowledge@Wharton: And yet you persevered.
Haddad: I was enjoying it and fortunate enough to overcome all those obstacles. Because I now know how to overcome them I can help other budding entrepreneurs. I started Yallastartup in 2009. Let's just do it: It's a call to action.
Arabic Knowledge@Wharton: What is the role of platforms like Wamda in the "new" Middle East, especially when considering the huge social media engagement of the younger demographic in the region?
Haddad: By being so passionate about this whole ecosystem I've been asked to reshape Wamda into something that is going to disrupt the status quo on all levels. That is really Wamda's willingness to close the entrepreneur gap. I will have the opportunity to work with the best minds of the region like Arif Naqvi, founder and CEO of Abraaj Capital and a true visionary, and Fadi Ghandour, the CEO of Aramex and one of my role models.
Arabic Knowledge@Wharton: That's a huge undertaking. You're basically talking about building infrastructure where new business can thrive. Let's start with that concept.
Haddad: The cycle of entrepreneurship does not exist. That cycle needs passionate young entrepreneurs, a supporting ecosystem, private sector that is not afraid of working with small startups, angel investors, and an older generation of entrepreneurs who either succeeded or failed.
We're at the beginning of that wheel. We don't have entrepreneurs who started and failed, and who can then set examples. So we need to take the brush and start painting without waiting for the image to paint itself. Once the wheel starts going and that picture is painted completely the ecosystem can just maintain itself.
Arabic Knowledge@Wharton: Where do mentors fit into this vision? Why is Wamda spending so much time trying to cultivate these relationships?
Haddad: Mentorship is something that will go a long way in developing the ecosystem. I've seen it firsthand. The biggest problem in mentorship is how to scale the model up? How can you keep the mentor invested? I'm not sure how it will happen. It's one thing we will test with Wamda. The main thing is how can we keep the mentor invested so they actually are engaged with the entrepreneur?
Arabic Knowledge@Wharton: You're not just talking about it; you're also a mentor, right?
Haddad: I'm mentoring 10 entrepreneurs. Mentorship is not a check mark. It is a very engaging process. It is a very demanding process. Recently, one group was asking me about the terms of a deal. I was helping them negotiate it. How can they take this to the next level? Being a mentor is not just spending a few minutes but really being able to think about the startup on the holistic level and see what works, especially how it works in the Middle East.
Arabic Knowledge@Wharton: So, Wamda has started MentorMatch, an online platform to help mentors and mentees build relationships. Tell us what Wamda hopes to accomplish with this platform.
Haddad: Models exist elsewhere although they are not fully tested. There is the Endeavor model, a great model but that carefully selects its beneficiary entrepreneurs. The Mowgli Foundation is more open. [MentorMatch is a joint venture involving Wamda and Mowgli.] We want to find a hybrid between those two. We believe aligning interests of mentors and mentees will be the key to a successful vested relationship.
We are up to a big challenge and we will measure ourselves by the palpable impact [that it has on the ecosystem]. As a company, we're looking at things in a disruptive and experimental way. We're going to change and adapt to the matrix that we see happening on the ground until we find the right recipe. There are no recipes today on how to accelerate emerging markets. Every country has its own recipe and that recipe has to be developed from scratch.
Arabic Knowledge@Wharton: You've certainly had experience at resonating deeply in an immigrant community when you started Relief Lebanon. Has that undertaking led to your optimism about what MentorMatch can eventually accomplish?
Haddad: The main advantage is the Lebanese community has a lot of immigrants everywhere -- about 14 million of them and a lot of them are entrepreneurs themselves. It's about finding those people and having them give back to their country. You'd be surprised at how receptive and how excited people get when you build those channels. So it's about building the right channels and building the right components to keep incentives high and at the same time making sure it is a model that will be sustained and very much personalized.
Arabic Knowledge@Wharton: What if you're a young, talented individual from Gaza that doesn't have any support, but has a laptop and an idea? How does she or he find you?
Haddad: When you say Gaza, it's a much tougher situation. Gaza has a smart geek community. Google is investing in Gaza. Abraaj has a US$50 million fund (Palestine Investment Fund), under Riyada Enterprise Development. The guy with no connections, if he is hungry for success and passionate enough he will use the channels created for him. Our goal is to make sure those channels and those roads are clear enough for him when he actually decides to drive the car.
Arabic Knowledge@Wharton: In other words, anyone who wants to be an entrepreneur just has to be creative enough to find the help?
Haddad: Our goal is making it easy for him to find that help. By having the platform, by having MentorMatch, by having the content, by making and helping with investments, by having access to the press coverage we have at Wamda, the channels are set up for them. If he wants to do that, that's up to him. Our goal is to make it easy and remove as much of the risk and uncertainties.
[LinkedIn co-founder] Reid Hoffman likens the entrepreneurship ride to someone who jumps off the cliff and as he is going down the cliff he is building an airplane. The goal is to takeoff before you crash. In the Middle East it's the same picture but it's cloudy and dark and maybe the entrepreneur doesn't have the manual to build the airplane. Our goal is to get this all of this out of the way so he doesn't have any issue jumping. He has the same chances of taking this plane off as if he were in Silicon Valley.
Arabic Knowledge@Wharton: How important is it to cultivate mentors from their own countries?
Haddad: I don't think language is a big barrier. What's important is the physical connection. A phone call, email or a Skype call is good. But nothing beats having a coffee or a tea and talking face-to-face. A mentor-mentee relationship could be looked at as a structured relationship, meaning I have a question, you have an answer. However that's not the ultimate goal. The goal is to allow room for creativity to occur between the two individuals.
This is something that has been proven to work in Silicon Valley. You need to have the key actors interacting with themselves on a small level. You have to have a mentor and a mentee; you have to have an entrepreneur; press coverage; an investor and academics. This is why the physical connection is very important. The more you do that on a higher level the smarter the system looks. And that's what we call the ecosystem.
Arabic Knowledge@Wharton: Is there a target number that you hope to reach as you build this system?
Haddad: Our focus is not on the mentors but the mentees. The mentors are going to be easy to find. But we need to convince entrepreneurs they need to be mentored. Not everyone admits this. How can we convince the whole ecosystem this is good and will create opportunities?
Arabic Knowledge@Wharton: Do you see a bigger calling than just making money?
Haddad: A lot of people in the Middle East feel this way because there are a lot of emerging markets and opportunities but also a lot of obstacles. We feel we owe it to them. And it's not just being altruistic but it is something the region depends on to be able to survive for the next 10 or 20 years. In the next 10 years the region has to create 100 million jobs whereas in the past 50 years the region created 60 million jobs. Those numbers are scary. Unless we really think about it and how we're going to solve it and get on it, then it's going to get ugly.
Arabic Knowledge@Wharton: What are the possible solutions to the youth bulge?
Haddad: Entrepreneurship is the solution for that. It's a way to give the young brains that grow up potentially unemployed and miserable an opportunity. They can say, 'I don't care if I have a job or not, I'm going to create my own job, and create some for my friends.'
This is really what we will measure ourselves by at Wamda. It's not how much traffic we get on the site or the number of events we do or investments we make, it's really how much room for business opportunities we can make for the whole region. If we are able to create opportunities for the region, if we're able to create that value, then it's only natural that we as a company would be profitable. We are not a nonprofit. Our profits are directly tied to the impact we make on the ecosystem. If we are successful we're going to get a piece of it. If we don't, then we won't get a piece of it. It is as simple as that.
Arabic Knowledge@Wharton: What about the political instability of the region? How is that affecting your plans -- or just your mood about moving forward?
Haddad: A lot of my friends from the entrepreneurship ecosystem are as vocal and are as ready to fight for their freedom as Che Guevara was. The new Che Guevara has taken on a new face. Their weapon is their keyboards. The end result is debatable. What is not debatable is the use of innovation to take these countries from pre- to post-democracy. This is the same kind of innovation that excites me as someone who wants to figure out a way to build and set up the new companies of the Middle East. To me, I look at it as something optimistic not because of the end results but because of the causes and the players who have played a role.
Are the young people in the Middle East ready to innovate? Yes. The market has always been there. It's not that the geopolitical situation has changed anything. It's just that the geopolitical situation has made them a bit more hopeful.
Arabic Knowledge@Wharton: What is the investment for Wamda?
Haddad: I can't share the financials. But basically we are defining a strategy that is a hands-down approach.
Arabic Knowledge@Wharton: What about your team at Wamda? How are you approaching it?
Haddad: We are looking for smart people who are super passionate about entrepreneurship and are making a huge impact in our region. Our activities will be spread between creating content for the site, helping and investing entrepreneurs, connecting to partners, building community through events and other programs. We are at the beginning of our journey so we are looking for entrepreneurial people to join in on this amazing ride and make a change.
Arabic Knowledge@Wharton: You're familiar with TechWadi's MentorCloud? You've mentioned Mowgli and Endeavor. Is there room for all these approaches to mentorship in MENA?
Haddad: The more the merrier. The ecosystem will decides on what platforms fit what needs. At the end of the day we all need to be interacting so the whole brain becomes smarter.
Arabic Knowledge@Wharton: You sound so busy with all your enterprises. Are you married with children?
Haddad: I'm married to my startup.
This article was initially published September, 2011 on Arabic Knowledge@Wharton.