Saudi, We Have a Problem: Where Are The Real Entrepreneurs

by Osama Natto, January 15, 2013

Saudi Arabia is full of what I call wanna-preneurs: they attend entrepreneurship events, call themselves entrepreneurs, and even get other people to call them entrepreneurs, but they’re not real entrepreneurs. There are 5 main types of poser entrepreneurs, and I’m going to cover them in this article in hopes that they will either dive in or get out of the way for people who are serious about entrepreneurship.

If that last paragraph offended you, you’re probably one of the people I’m talking about, so consider this your wake-up call.

Where are the homegrown Saudi entrepreneurs?
I get a lot of calls from local and international organizations asking me to provide them with the names of local, homegrown Saudi entrepreneurs, either to appear at an event, make a speech somewhere,  be nominated for a program, or be nominated for an award.

I should send these organizations a blank piece of letterhead with my signature at the bottom, because every time I’ve tried to make such a list, I couldn’t find true Saudi entrepreneurs that weren’t already well-known. It’s always the same list, with the same people coming up again and again.

Here is the list that always come up with a few real Saudi entrepreneurs:

Now, the list of people who call themselves entrepreneurs in Saudi Arabia is huge. I’m in connection with about one or two hundred. But when I look at all of you, the thousands of so-called entrepreneurs, examine you individually, and learn more about you, only a few of you are real entrepreneurs.

If you’re a real entrepreneur, you create something new, whether it’s a product, service, or organization. A real entrepreneur then takes that product, service, or organization and scales it, making it grow to the national or international level. A real entrepreneur sustains what they have created, overcoming obstacles along the way.

Most of you aren’t there. Here are the 5 categories the rest of you wanna-preneurs fall into:

1. The Employee with the Hobby
You have a very nice website, service, product, or retail outlet, but you’re still holding on tight to your day job. Or, maybe you’re a student who is still going to classes every day to keep your allowance coming. You have one leg in entrepreneurship and one leg in employment because you’re just not sure. Either you’re unsure about yourself, your product, your service, or the market. You don’t believe that what you created is going to grow to a satisfactory level.

You’re not an entrepreneur. You’re a hobbyist.

If you were a true entrepreneur, you would create the job you truly wanted and start doing what you love best full-time. You would grow your product, grow your service, and grow your company.

Until you quit your day job, drop out of school, and stress out your family, don’t call yourself an entrepreneur. Just tell people that, by the way, you have a small business on the side to make some extra money.

2. The Employee with the Portfolio
Just like your friend above, you work an office job, but also invest money in other companies. Oh, Saudi Arabia is full of you guys. You think this makes you an entrepreneur, but actually, the guy who’s running the company you’ve invested in is the entrepreneur.

You’re not an entrepreneur. You’re an investor.

Until you stop pushing papers for your boss, don’t call yourself an entrepreneur. Be honest and tell people that you’re both an employee and an investor.

3. The Rich Boy (or Girl)
You’re a member of what I call the Rich Kids Club, and you’re the most annoying of the group. You’re part of the second, third, or maybe fourth generation of a Saudi family that is rich, well-known as traders, or focused on industry. You drive an expensive car, wear fancy clothing, and travel first class. You use Daddy’s allowance to start a few small businesses here and there, but you don’t branch out.

You’re not an entrepreneur. You’re just rich.

If you’re a real entrepreneur who happens to be from a rich family you make your own path -and I know some examples-. Maybe you do use your family’s money, but you don’t rely on it. You use the money you have to create your own business concept. You take risks, sustain your business, and grow it to the national or international level. You do not go back to family for financial support during bad times, you figure it on your own.

Until you do that, just remember that being rich doesn’t make you an entrepreneur, and being an entrepreneur doesn’t make you rich.

4. The Tajir
You buy stuff wholesale, then sell it retail. You find wholesalers, pick a place to open up shop, put together a decent product mix, slap prices on everything, then start selling. You call yourself an entrepreneur, but inside, you know that anyone with a few basic skills and a few hundred thousand riyals can do what you do. Anyone who knows how to find a location, find wholesalers, and maybe travel to China can replace you.

You’re not an entrepreneur. You’re a tajir.

If you’re a real entrepreneur, you take the small business model covered above and make it your own. You brand it. You create value-added services like delivery, an excellent product mix, or integrated products, and you use that to grow and sustain your company.

Until you start creating value instead of just buying and selling other people’s stuff, call yourself a trader.

5. The Franchisee 
You run a franchise business, happy to rely on someone else’s ideas and pay them royalty fees. You didn’t create the brand, the products, the services, or even the business concept itself. You just re-applied an idea, maybe from Asia, Europe, or the United States, that had already been ready before you came along.

You’re not an entrepreneur. You’re a small business owner. Or, if you’re with a big company that has hundreds of chains, then you’re an investor.

If you’re a real entrepreneur, you’re the one creating the franchise instead.

Until other people start paying you royalties, it doesn’t matter how many branches you run, because you’re still not an entrepreneur. So, tell people you run a franchise, then ask if they would like French fries with their order.

Let’s review.

  1. Running a side project while working a day job or attending university isn’t entrepreneurship.
  1. Investing in other companies isn’t entrepreneurship.
  1. Running a small business fully backed by your rich family isn’t entrepreneurship.
  1. Buying and selling other people’s stuff without adding innovative value isn’t entrepreneurship.
  1. Owning a franchise business that you didn’t have a hand in creating or developing isn’t entrepreneurship.

This is bad news for Saudi Arabia. 
Saudi Arabia has a serious problem when it comes to growing local entrepreneurs. There aren’t many Saudi entrepreneurs who are truly homegrown, all the way from the seed to the fruits. This presents a big challenge.

So, who’s responsible for going and creating those entrepreneurs? You, the future entrepreneur, along with your family, the community, and me. We’re all responsible for the environment we create.

Now, let’s truly define entrepreneurship.
We need a clear definition of who is a real entrepreneur and who is a wanna-preneur.

A true entrepreneur is someone who does all of the following:

  1. Has an idea
  2. Creates a product or service
  3. Creates a company
  4. Creates a brand
  5. Creates a customer base
  6. Puts together the product mix
  7. Puts together the pricing mix
  8. Grows their company and makes it go national or international
  9. Overcome challenges
  10. Do it all over again and again

Saudi Arabia needs more entrepreneurs to create an entrepreneurial ecosystem.
We need to create new sub-economies in Saudi Arabia., sub-economies to create value outside the traditional economy of oil & gas, real estate, and intensive-low-cost-manpower-businesses. Without the economy created by entrepreneurs, job growth will remain at low levels and we will not see new  young self-made millionairess and billionaires that will contribute to the prosperity of Saudi Arabia. This country needs your help to create an entrepreneurial business environment. So quit your job if you have to, drop out of school if you have to, and get serious about entrepreneurship. The next time I get a call asking for a list of Saudi entrepreneurs, I want to be able to write a new list, and I want you make sure your name is on that list.

Now stop reading blog posts and go become a real entrepreneur.

 

Disclaimar: this article was first published on OsamaNatto.com on 10 January 2013.

 
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