Startup Watch: the tech-media-sports nexus, and Egypt, well done.
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 sports, Mario Kart (but not exactly Mario Kart), founder pedigree, and a little something to lighten the end of the working week.
Sports: it’s not just about the game. US investors are putting billions into sport startups (if you can’t buy the team to get courtside seats…) and it’s the intersection of tech, sport and media where they think the money’s at. We’re a bit more diverse in MENA. You’ve got the camel racing guys, the Tunisian fantasy footballers, the e-gamers, and swimming wearables in Lebanon and in Saudi. We also have skateboard wearables, and of course, there’s MENA's own media-sports-tech startup in Bahrain.
Egypt, well done, here’s what not to do next. The biggest story in the region this week was out of Egypt. Words finally translated into action and they floated the pound, freeing the entire country (startups included) from a currency squeeze. No one doubts what comes next will be hard, but so long as they don’t do a Russia - or worse, a Nigeria - hopefully this is the rope ladder to success.
Did he… did he really just say that? Still in Egypt, Ahmed Alfi has long been a dedicated opponent of too much government involvement in startupland. However, in this piece we think we detect a change of heart: is Egypt’s entrepreneurship godfather really suggesting governments invest in startups?
Too many startups like playing startup. Is this you? Because if it is, you need to stop. If you’ve fallen in love with the idea of having a successful business and you recognise you’re doing any of these seven signs, then it’s time for a rethink your approach.
Wamda of the week: cash is oxygen. Scaling from a scrappy startup to a mature SME is hard, but not because your challenges get bigger - they completely change. Instead of revenue, you need cash. Instead of all-rounders, you need dedicated managers. Instead of an incubator, you need a board.
The death of Lean. For about a decade everyone has been banging on about the Lean Startup method: do it fast, dirty, and cheap. But this year we’ve been seeing some backlash. You can’t deliver a minimum viable artificial kidney product to a customer, because that’s just dangerous, or design an eye implant and just put the first version in someone’s eye. The rise of the hardware (and AI) startup is beginning to subvert the cult of Lean.
How much equity is too much equity? 90%. By the time you exit your multi-billion dollar startup, you’ll want to have held onto as much equity for yourself as you could, right? Well if you manage to keep 11 percent, you’re doing as well as your American peers.
You’re the CEO? Don’t get comfortable. CEOs are getting fired more often lately. In exchange for a multi-million dollar salary they’re expected to be practically perfect. So for all you young CEOs out there, keep this in mind: executive expectations are changing and tolerance for screw ups is waning.
Lebanon’s legal building blocks are like Mario Kart. Like all countries in MENA, the rules around starting, running, and ending a business in Lebanon are terrifying. But it’s also like Mario Kart: you can see the route ahead and, if you’ve done your preparation, you’ll know where the rainbow tiles and oil slicks are. Only then, can you dodge the bananas thrown by your competitors.
It’s easier to raise money if you’ve got pedigree. But you may be more likely to survive in the long term if you don’t. This is the classic story of the cool guys who’re invited to the right parties and know the right people, then get seed funding practically forced on them. But easy street doesn’t last forever so sleep safe in the knowledge that early struggles are good practice for what comes next.
Feature image via Pexels.