Three top tips from savvy Gulf startups

Faye Bartle

Monday 18 April 2016

The technology startup scene in the Gulf is on the rise, with a number of seed accelerators entering the market in recent years. What can big enterprise learn from these nimble newcomers?

The recent increase in startups and seed accelerators across the Gulf region is especially pronounced in Dubai, where access to emerging markets combined with high smartphone penetration and digital video consumption rates create an ideal launch pad for new businesses.

However, staying agile in a region that’s still finding its feet can be a challenge. Many tech startups in the MENA region struggle to identify and secure funding due to a lack of support from banks and investors, according to research by Dubai Silicon Oasis Authority (DOSA). The survey, carried out in collaboration with Google and YouGov, also highlighted challenges in securing office space and attracting trained employees, while general consensus called for more flexible labour laws to benefit all those involved.

Despite the teething problems, there are some fantastic examples of businesses that are championing innovation. AstroLabs in Dubai, for instance, is the only Google Tech Hub in MENA offering licences to all members and, as such, has helped a roster of businesses to make their first foray into the market.

1. Seek out lean solutions

One of AstroLabs’ members is KenziBox, an online subscription and ordering service for themed craft boxes aimed at parents of young kids.

“It’s a challenge to get a startup off the ground in a lean way in this region, given just the legal set-up costs,” says co-founder Leyla Lahsini. “Having said that, it keeps you on your toes in terms of the financial viability of your business as you have the deadline of having to repay the legal fees again in 12 months. The positive side to this is that it taught us to be flexible about our initial idea and we went with a mindset of quickly adapting and responding to customer demands.

Also, as you have already spent a substantial amount on your legal set-up, you find yourself becoming lean in all other areas from marketing to sourcing. I like to think of lean as ‘becoming creative’ in this instance, as often the easy path is the costliest one, and you can find better solutions if you are forced to think out of the box.”

2. Source the best employees

“Our biggest challenge has been human capital,” says Joss Leufrancois, founder and chief executive of Visage, which fittingly developed a crowdsourced recruiting platform for startups in the region. “The kind of talent needed to aid tech startups is not really fostered by universities in this region, so we tend to recruit from Europe, South Africa and Asia – both for ourselves and our clients like Careem and Fetchr.

“There is growing interest from young people to develop the skills needed to become part of a tech startup, and they are enthusiastic about changing the way things are done. However, the scene is still relatively small in this region and we are competing against larger companies to attract the best candidates. Video screening is a cost effective and efficient way to help businesses find the right people, wherever in the world they are located.”

3. Know the environment in which you operate

Tavis Butler, founder of Madison and Watermill, a boutique startup consultancy, makes an important point about getting finances in order.

“Bank accounts are difficult to get set up due to the high level of capital required at inception, so shop around,” Butler says. “Having multiple currency requirements for e-commerce can be a challenge, but some banks will enable this for you. Being incorporated in the UAE helps when it comes to opening your bank account.

“It important to network. This region in particular is very small and is built on relationships. Be active, social and promote the startup community as you never know when you will find a future investor, customer or member of your team.”

With the Gulf region becoming increasingly supportive of startups, there’s plenty that larger organisations can learn from these nimble new companies on the block.