Why we left Dubai: A Bahraini startup's challenges

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In a previous post, I wrote about the reasons why my startup (fishfishme.com) made the move to Dubai and how we settled there.

Following the piece, I received a lot of feedback, but some seemed to think I idealized the process, saying, "You made it look too easy, that doesn't reflect the real situation." So I decided to write about the reality of what can go wrong when you move, and the difficulties of getting your startup established in Dubai, through the eyes of Bahraini startup Exa.io, who I first connected with when the founders left a comment on my previous post.

This is their story.

How does Exa.io work and who is involved?

Exa.io is a technology startup focused on utilizing the cloud for 3D rendering computing projects. In simple English, we help companies and individuals create 3D movies, animations, or 3D architecture to do their work faster and cheaper.

We are four co-founders based in Bahrain - Mohammad Anwar, Zakaria Ben Hamouche, Ibrahim Mokdad, and Ahmed Yousri - each with a technical background.

Why did you decide to move to Dubai?

We moved to Dubai because we heard of a great accelerator called SeedStartup, which provides funding ($20,000 for 10% equity) and mentorship. We didn’t have anything like it in Bahrain, so we decided that if we got accepted, we’d move to Dubai.

So we applied online in March 2011, got accepted in August, and the program started in September that year and lasted for just three months.

Did you face any challenges before making the move to Dubai?

Mohammad: Dealing with family was difficult, as you might expect, especially because I had to convince them that it was ok for me to leave my stable job and go after a risky lifestyle.

Zakaria: I was in Paris finishing my Masters in Software Engineering when we decided to establish the startup. So instead of continuing my education or finding a stable job, I went after my dream. That doesn’t seem like a wise move to many people. Getting accepted at Seedstartup gave us social proof, and made it easier to convince our family to support taking the leap.

What difficulties did you face once you go to Dubai?

We didn’t get the money! We weren’t able to get the money from SeedStartup because there was a problem with registering our company with a 10% equity allocated to SeedStartup. Their investment arm wasn’t legally authorized to make investments at that time, although this problem has since been resolved. Without the money, we couldn’t pay for any of our expenses. So we lived in one of our friend’s apartments, slept on the floor, and promised to pay him the rent when we got the money.

What made things even more stressful was the visa situation. Since we couldn’t establish our company yet, we couldn’t receive any visas. We only could stay for two months as tourists and it was distracting to deal with. Before the end of the program, we basically needed to leave because we couldn’t register the company.

So in December we separated; Mohamed went back to Bahrain and Zakaria to Algeria. Later on, we were able to receive the money after registering the company in Delaware in the U.S.

Despite these initial issues, how useful was the program?

The program was great for us, other than the money and visa situation. We learned how to pitch in front of investors, and we were able to pitch at an Investors Day. We also got access to many great mentors that we are still in touch with. Moreover, we learned a lot from working with the four other startups in our batch (from Italy, Tanzania and Greece). We highly recommend SeedStartup, especially now that they’ve solved their investment problem.

Although, we must warn that it will be the most stressful three months of your life; Seedstartup will throw you into the market and expect you to deliver many things in such a short period.

Where is your startup today?

Now we are based back in Bahrain and have received support from Tamkeen and a grant from the Bahrain Development Bank. Building our technology has been a huge and time-consuming task, but we are planning to go live very soon. We have already begun working closely with some customers to test the product.

What advice do you have for other entrepreneurs looking to move to Dubai?

First, register your company in Delaware, U.S.; it will only cost you US $300. Many startups in the States register in Delaware because it’s tax free, but not a free zone, it’s called creating a C-Corporation.

If you are a tech-focused company, you may not always need to be based in Dubai to attract new clients. You only need to be able to visit your clients or have a sales representative there. But Dubai does have a large pool of talent, so if you’re looking for quality team members, Dubai is a great place to find them. Keep in mind, however, that you’ll need a bare minimum of AED 6,000 (US $1,500) to cover your living expenses in Dubai each month.

While the challenges that Exa.io faced may be unique to their experience, their story still highlights the difficulties of securing a visa, registering your company, and paying your way at the start.

Check back for part two of this post where we’ll highlight some specific options for moving to Dubai, including: In5, SeedStartup, SiliconOasis, and going it alone. (Disclosure: Our startup fishfishme.com is currently being incubated at In5.)

Feel free to share your own challenges and experiences in Dubai in the comments section below.

Update: SeedStartup has since responded to clarify how they worked to support Exa.io through the process of incorporation. See their response in the comments section below.

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