AUC’s downtown campus is currently playing host to the Rise Up conference, a well-organized and attended celebration of entrepreneurship whose morning session has offered an exciting and sometimes spirited discussion about the challenges of starting a business in MENA.
The day began with an energetic presentation by Dave McClure, the American founder of 500 Startups, a prolific Silicon Valley investment vehicle. The lecture, which took place outdoors under a verdant jacaranda canopy, started with an exposition of how ecosystems develop. According to McClure, the essential elements are product, market and sometimes, investment.
Elaborating, he explained that investors are in the business of managing risk and that they seek to be rewarded for the risks they expose themselves to. More pointedly, he said “if you can avoid it, don’t take investor money.” McClure underlined the argument at a later stage in the presentation. “No one will give [investment] for a prototype,” so if it’s manageable, build without seeking investment.
At the same time, McClure claimed that talent and opportunity are widely available in the region and that “investors need to take more risks.” He repeatedly enjoined the investors in the audience to think about investing in startups as an undertaking in portfolio management; pick many and hope for a few successes. Indeed, that thesis underpins 500 Startups' own strategy.
The Arab World Meets Silicon Valley
McClure’s session was followed by a panel discussion moderated by Chris Schroeder, author of the widely cited and lauded book Startup Rising. The panel, which was entitled The Arab World Meets Silicon Valley, saw Schroeder mostly discuss the investment landscape and associated challenges in MENA with notable investors in the region. Aramex founder and Wamda Chairman Fadi Ghandour made the point that growth markets – virtually the entire MENA region along with other non-Western parts of the world – were “growing at four times the rate of developed markets.” His point that the future of big opportunities belongs to people in MENA was tempered by his admonition that “we need to educate investors” who do not seem to understand the region’s potential.
Dave McClure, Hala Fadel – who leads the MIT Arab Enterprise Forum, and Ahmed Alfi – founder of Sawari Ventures also participated in the panel. Alfi expressed his admiration for self-educated people in the region who “have the ability to catch up and skip a generation” as they build the technologies of the future.
One of the more engaging exchanges came when Fadel disagreed with Ghandour about the merits of the regional market alone. She made the point that limited internet penetration along with constrained purchasing power meant that the best opportunities for regional entrepreneurs were global. Ghandour responded that it was necessary to begin by selling to one’s neighbors – in other words, to validate business models locally.
In all, the morning sessions of the Rise Up conference have been engaging and informative. Check back here for additional updates throughout the day.