Startup Watch: Saudi cash, zombie startups, and your how-to-fire guide
The world of entrepreneurship news is a complex one, with people ever ready to give their two cents on how you should be running your business/VC fund/incubator. Here’s our wrap of what we’re reading on f-f-f-failure, analysis, the zeitgeist, and a little something to lighten the end of the working week.
To take the money or to not take the money, that is the question. The ramifications of Saudi Arabia’s Uber deal are still ringing in the open plan offices of Silicon Valley’s greatest. Tech leaders are twisting themselves in knots as to whether they would have accepted the huge $3.5 billion wad of cash from the country’s Public Investment Fund (“We want to make money for folks who are tolerant and agree with our principles”, “Not every entrepreneur will feel comfortable with sovereign-wealth funds from countries with different priorities”, etcetera). All of which seems very far away from the cash-strapped startups over here, who’d likely love a bit of that Saudi oil money.
Kill your zombie startup and let it fail. Failing is taboo in the Middle East - everyone knows it. You’re told ‘oh it’s ok to fail’ but is that the reality? Yet the Bahraini founder of Skiplino wants you to try it on for size. He says it’s up to you to be vocal about your failures in order to make it acceptable, nd so prevent “zombies” - companies that have no chance of survival but just won’t die - from clogging up MENA’s startup arteries.
From us to you: entrepreneurship is a form of resistance. Karmsolar’s CEO Ahmed Zahran is a force to be reckoned with in Egypt’s solar scene, and gave our correspondent in Cairo an emphatic answer to questions about the company’s goals. He wants to get everyone off-grid; not in the back-to-the-land, flush-your-toilet-once-a-day sense, but to give people control back over their lives.
‘Your new hire is from Souq? Well my latest is from Google’. There is a time and a place to hire the big names away from the big name companies, but under pressure from your investors or cofounders is not one of them. Specifically, because their skills - despite the pedigree - may not be what you need right now. Know when to hire the company men and when to hire the startup women.
And when to fire them… Expensify has a weird hiring strategy: it advertises the fact that they fire people. Which, for anyone who’s worked with disruptive, lazy or just down right bad colleagues, is a breath of fresh air. If you’re terrified of firing (or it’s your first time), they also outline their process for how to do it properly and fairly.
Your connected toaster is not really yours. To all Internet of Things startups in MENA, please don’t make it into this column (or the associated Twitter feed). The light side is having to wait for your rubbish bin to complete a software update, or the cat getting stuck outside because your wifi is down. The dark side is more sinister.
Careem’s captains out of a job? The local startup is bringing driverless pods to Dubai, in a first for the region. It’s well known that the majority of a taxi journey’s cost is from the driver’s salary, so getting rid of the driver is a good use of that $100 million Careem is spending on R&D. Indeed, it’s exactly what key rival Uber is doing. And while this kind of technology is likely only possible on the Emirates’ well planned, well regulated streets, the unsaid question remains: what’ll happen to the drivers once this takes off?
Get the network effect. A network effect is when people connect with other people using your software, and in doing so add to its value. Facebook is an example of a platform where the first and foremost value proposition are the networks people build on it. So it’s kind of important for a certain type of business. The question then is how to create it, how to harness it, and how to grow it.