Due to the challenges that hit the economic and social stability in the Middle East and North Africa, the region faced difficulties that prevented it from becoming a hub for startups. Nevertheless, some paved through a tough unstable road to achieve their long-awaited success. What are the main challenges that prevent a good idea from booming? How did do entrepreneurs overcome challenges? How to startups overcome challenges?
Why is entrepreneurship important? And what are the challenges?
When the region is facing a high rate of unemployment, it’s essential that new players enter the market. The market is constantly demanding more, and there is always a space for one more entity. Since each startup has to have an edge and an added value to the market, it is important to create a room for more startups to emerge to regenerate the economy.
- Investors are not interested in the MENA region as much as other regions
Since investors are far less interested in investing in the Middle East, lack of fund stands as one of the main obstacles in the face of the startups in the region. Issues such as poor infrastructure in some countries, slow internet, and electricity cuts really affect the productivity of these startups. This leaves more than 70% of investors with a little return of investment than expected. Such an atmosphere would not foster many new projects.
However, many entrepreneurs found a way out of this dilemma. Countries such as Egypt, for example, lack stability but are filled with good caliber and talents. Bassem Elhady, CEO of Kijamii, believes that for any Egyptian startup needs to acquire the largest number of international clients in order to survive the economic instability in the country. On the other hand, it needs to keep a technical kitchen, with a relatively low cost.
- Hiring the right talents
Great ideas need great planning and a huge amount of work to turn it into a success story. The thing is that entrepreneurs tend to rely on the idea, without investing in training in management. After a while, the ideas fade into an execution phase. In this phase, many managerial issues stand as an obstacle in the face of forming a successful startup. Even if the entrepreneur has the required managerial skills, he/she would still need to find the right caliber. Mai Medhat, CEO of Eventtus, assures that a great idea doesn't always make it, the development of the startup is what matters most to its continuity.
There are many great ideas that don't make it. The best way to succeed is to plan and execute, and hire the right talents. - Mai Medhat
Tarek Amin, CEO - Digital in Adline Media Network, believes that one of the main challenges entrepreneurs face is finding the right co-founder who complements them and shares the same vision.
- Poor fundraising habits
Entrepreneurs’ most common mistake in the middle east is raising funds for their startups’ needs in the meantime without considering future plans. Funding is crucial to the continuity of a startup. Most entrepreneurs raise funds enough for what they need in the year ahead, while they are advised to consider funds for 2 years ahead.
- Small portfolios
We hear about many entrepreneurs who started off their own project after gaining a lot of experience in their sector. Building a huge portfolio and a large network will definitely speed-up the development of a startup. Bassem Elhady consumed two years after establishing Kijamii to build an excellent reputation that attracts prospects.
How Do Startups Survive Economic Instability?
As Egypt is full of talents and good caliber, having a startup in Egypt is very risky due to the economic instability. Although it is advised for startups to keep a technical kitchen fully functional in Egypt, it is also essential to attain the majority of clients from abroad.
Mai Medhat from Eventtus believes that having an international office might be hectic, but it eases things as economic changes occur in Egypt. I believe Egyptian talents and international clients will definitely help a startup overcome financial crises and economic instability.
Do challenges decrease as a startup grows?
Challenges differ from one country to another, as well as from one stage to another. In UAE, for instance, economic instability is not necessarily the most alerting issue, while management is a key to continuity.
Mohamed Al Zaben, CEO of Lunch:On, believes that good management and execution are pillars to take off as a startup. However, as the startup grows, problems keep on occurring, and that doesn't change. He resumed, "the silver lining is that as your startup grows, so does your experience and ability to overcome bigger and more complex challenges."
From a mentor's point of view, Tarek Amin sees that one of the main challenges is to find the talents to execute the vision an entrepreneur has.
Good management of resources and financials are important to keep a startup safe through crises. - Tarek Amin
Amin advises entrepreneurs to not tailor their product to only one market and make sure it is ready to be exported to other markets without facing any unexpected challenges.