The UAE has historically been the start-up hub of the Middle East. As it strives to become the smartest nation on the planet, we look at the opportunities for entrepreneurs in this brave new world.
A joint study released by Dubai Silicon Oasis Authority, YouGov and Google Middle East and North Africa (Mena) in October reported that tech small to medium-sized enterprises (SMEs) and start-up entrepreneurs in the region are young, with 88 per cent of founders under the age of 35.
A common misconception about starting a business in Dubai is that it is extremely difficult, and entrepreneurs need to arrange funding themselves. While this is true in several cases, start-up incubators and programmes do exist to help the process along.
Entrepreneur Rashid Al Ahmadi, Founder and CEO, Signifi Solutions, a mobile application and IT solutions company, tells GN Focus that in his experience starting a business in the UAE is not that difficult when you have the right people to support you.
Al Ahmadi launched his company with the help and guidance of Tejar Dubai, an entrepreneur development programme run by the Dubai Chamber of Commerce and Industry that mentors UAE nationals.
“The government does a great job of supporting start-ups with many incubator centres and start-up support programmes established to facilitate and help people with brilliant ideas to establish their own businesses and make their dreams come true,” says Al Ahmadi.
Potential entrepreneurs in the UAE have access to a few organisations that can help them with their business. These include in5, a Dubai Internet City-based incubator, SeedStartup, an international start-up accelerator, TURN8, a DP World programme, Flat6Labs Accelerator, recently opened by twofour54, and AstroLabs Dubai, the only Google-partnered tech hub in Mena, which is scheduled to open in April in the Dubai Multi Commodities Centre Free Zone.
Each organisation provides a wide range of services and entrepreneurs have the option to choose the programme that best suits the requirements of their start-up whether it needs mentorship, office space or capital financing.
For instance, AstroLabs does not take an equity stake in the start-up, but instead charges a monthly membership fee starting from Dh1,500. TURN8, on the other hand, offers successful applicants seed funding valued at up to $30,000 (about Dh110,000), while retaining a small equity in the launched commercial entity. Applying to in5’s programme costs nothing and the hub helps start-ups gain exposure to angel investors and venture capitalists.
Adam Ridgway, Managing Partner, Travall, a video concierge guide to the UAE, and The Mediacubed Group, came to the UAE six years ago and has successfully launched several start-ups, such as
AdBrand.tv, a branding agency, and Dotcasting.com, a talent agency. “I found out that there are so many opportunities here, not just to take, but to give back as well,” explains Ridgway, who launches the
Travall.tv website today.
Having launched his first business in 2008, the serial entrepreneur admits it was the hardest thing he has ever done in his life. “Setting up my first business at the start of a recession was very trying. It was self-belief and a good idea that has enabled the business to grow,” he says.
Despite being quite difficult, Ridgway believes start-ups and proactive entrepreneurs in the UAE now have the necessary infrastructure to succeed due to the direction the country is heading in.
Entrepreneurs looking at launching a start-up that focuses solely on technology, could consider The Dubai Technology Entrepreneur Centre (DTEC). It is a dedicated business centre that accommodates and supports young technology companies, with charges for a flexi-desk starting at Dh6,000, while a dedicated workstation begins at Dh12,000 per year.
DTEC currently provides the space and infrastructure to nurture a start-up, but it does not invest in the company. That is where the Silicon Oasis Founders (SOF) steps in. It is an incubation centre launched in 2012 that mentors and funds successful applicants, and is open to entrepreneurs of all nationalities.
SOF charges rent and payment for the trade licence at highly subsidised rates and acts as a shareholder in the start-up, taking a share of the profits.
Hans Christensen, Director of SOF at the Dubai Silicon Oasis Authority, says 10 companies are currently part of SOF. “This year we had three new companies join. The first two investments have graduated from SOF having secured follow-on funding, out of which one is approaching profitability. None of the companies has faced any failure over the past two-to-three years,” he says.
Regarding the amount of funding that SOF start-ups can apply for, Christensen says, “There are no set rules, but investment usually hovers between $15,000 and $150,000 (about Dh55,000 and Dh550,000).
“SOF offers to partner, invest and become a shareholder of the start-up. This helps us work closely and understand the challenges. Therefore, it is essential that we support [and] help the business venture become successful.
“Additionally, we have experienced managers that will support ventures with their expertise and quality advice,” he says.
On many occasions, SOF managers serve as board directors in the start-ups and bring their vast experience to the table, and that can sometimes help save a venture from bankruptcy.
On the next few pages, GN Focus talks to a few of the UAE’s technopreneurs about their startup experience in this famously business-friendly country.
Jiten Menda, 29, Indian
Inkmash.com is a website where you can personalise your own T-shirts, hoodies, mugs and more using an online design tool within the site and have it delivered to your door within a couple of days.
The company was 100 per cent self-funded and managed to break even after 14 months of operation.
“Raising awareness and generating traffic for our website was the biggest challenge we faced,” says Menda. “We got creative with our marketing techniques and worked on differentiating ourselves by focusing on personalised customer service and maintaining high-quality standards. This led to repeat customers and numerous referrals.”
He believes the start-up ecosystem has developed very well in the UAE over the past few years and budding entrepreneurs now have access to incubators, mentors, resources and government and private entities that encourage and support start-ups actively.
“We created inkMASH to be pioneers in the retail imprint industry. We are the first and only full-feature web-to-print service in the region. Online shopping continues to gain popularity in the UAE and we’re happy to be at the forefront of this evolution.”
Sergey Yusupov, 25, Russian, and Tarik Kaddoumi, 34, German
If bitcoin takes off in the UAE, Umbrellab will have been at least partly responsible. The software company specialises in building solutions and offers services that focus on cryptocurrencies.
Yusupov says his company fits in with the future plans for a smarter UAE. “Crypto payment technologies provide an incredibly easy and fast method of value transfer, and with further adoption of bitcoin, people will be able to manage their finances, pay bills, shop online and transfer value to each other with ease, higher security, and less effort and time.”
Kaddoumi adds, “Digital payments are a hot topic around the world in general, and the UAE can be at the forefront of these technologies with the focused efforts on a smart UAE. We have a lot to offer to the government and the private sector. We can improve many aspects of existing systems such as e-Dirham, ePay, mPay, integration with mobile providers, and many others. The difficulty is in challenging the status quo in order to change people’s mindsets to adapt new and improved technologies.”
The founders funded the project themselves, partly because their company is built around an entirely new concept, says Kaddoumi. “The market [for bitcoin] is still very small and the Middle East is a little behind in the understanding of bitcoin,” he says. “We try to overcome these issues by holding regular events where we demonstrate the platform and explain to individuals and businesses how they can benefit
Adds Yusupov: “This strategy has helped the company grow, and more and more people are hearing about our products and using them worldwide.”
Tariq Abdul Haq, 30, Jordanian, and Hamad Al Merri, 25, Emirati
Founder and CEO, and Co-Founder, Tawlat.com
UAE residents are now able to better indulge in their love of eating out with Tawlat.com, a new app that both confirms restaurant bookings and provides reward points redeemable by users at dining outlets.
Speaking about their initial phase, Abdul Haq says, “Like any other start-up, we had many challenges, the biggest being acquiring users and a network of restaurants at the same time. It is like the chicken-and-egg situation — what comes first? So we started inviting our own network of family, friends and colleagues to use the services until we succeeded in bringing in a huge network of diners.”
Both Abdul Haq and Al Merri invested more than Dh550,000 of their own money initially, and are now raising funds though Eureeca.com, a crowdfunding platform. The duo aims to grow their business and expand to other segments such as wellness and beauty.
“We expect to break even by the end of next year, with Dh12.4 million in sales by the end of 2017. We have a huge demand from diners with a niche market for restaurants to attract more diners at their low-business hours,” says Abdul Haq.
Al Merri says both of them are big supporters of the vision of His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai. “We’ve received enormous positive feedback and are extremely happy that everyone benefits from our services. On the other hand, our network of restaurants has attracted many loyal and repeat customers, who increased their sales,” adds Al Merri.
Rashid Al Ahmadi, 32, Emirati
Founder and CEO, Signifi Solutions
With a degree in Network Engineering and experience in the technology and telecom sectors, Al Ahmadi used the exposure to establish Signifi Solutions. The company focuses on IT and mobile applications that offer value-added services to customers and retailers. One of them is My Dubai, a user-targeted smartphone app. “I was lucky to join the Dubai Chamber of Commerce and Industry’s Tejar Dubai programme, which supports start-ups,” says Al Ahmadi. “They offered guidance and support on the business plan, calculating risks and understanding the requirements needed to start my business.”
He aims to contribute in the migration to the smart ecosystem and be a part of the government’s smart city initiatives.
“My solution offers users additional information while visiting malls, shops or local attractions. This information, managed by retailers, is transmitted to users’ smartphones via Bluetooth as soon as they are within the beacon’s range.”
The app gives users information on brands, deals and offers before they enter the venue — be it a store in the mall, a museum or public park. Retailers and service providers will have access to a wealth of statistics and reports generated to understand their customers’ behaviours and tailor marketing strategies to enhance their businesses.
Al Ahmadi is looking forward to the engagement of brands to pick up his solutions. “I took the risk and invested my own money to build the project because I believe in it. I also believe every Emirati needs to contribute in his government’s vision and goals.”
Mustafa Mahmoud, 30, Egyptian
Founder & CEO, MENA Commerce
It took MENA Commerce more than a year to get off the ground, says Mahmoud. The e-commerce start-up offers real-time data analytics, consulting services and accredited e-commerce training. The aim is to enable e-tailers and retailers in the region to improve their businesses.
Despite the long process, Mahmoud says starting up wasn’t difficult. “It wasn’t hard for us. Maybe it [would have been] in the past, but we were lucky to receive the support of several incubators in the UAE, which made our journey much easier,” he says.
The company has just raised its first round of external funding and now has clients in the UAE, India and Turkey, growing much faster than expected, says Mahmoud.
“Online retail, and e-commerce in general, is one of the fastest-growing industries in the Middle East and North Africa, especially in the UAE, where the number of online stores and shoppers has increased exponentially over the past few years.
“This trend will continue, and is exciting for us as we are an enabler for online retailers and e-commerce.”
The start-up won the Best Business Venture award for this year at last month’s Dubai Silicon Oasis Authority’s Entrepreneur Day Competition.
Ebrahim Colak, 35, Turkish
Founder & CEO, MrUsta.com
MrUsta.com is an online marketplace for UAE residents to find quality service providers such as painters, electricians, locksmiths, maids and mechanics. Ebrahim Colak explains, “Usta means master, guru or expert in Arabic. Users can access previous customer ratings of the ustas (service providers), their contact information and location on mrUsta.com”
In May last year, he approached three friends and introduced mrUsta. Within three months, an agency had been hired to put together the usta database. “We launched the beta site last December with in-house development, and in January it went live.”
Setting up was a challenge with regard to the entire process, requirements and cost, he says. However, the support of in5, an incubator, helped the team reduce costs. “We are looking for angel investors at the moment in order to reach our next phase.”
The site currently uses a freemium model where the service is provided at no cost. “We have not been generating any revenue because we want all our ustas to enjoy the benefits of mrUsta and get used to this new model,” says Colak.
The website has more than 8,000 visitors a month — an increase of more than 60 per cent over the past four months.
“As soon as we explain what mrUsta is to anyone, we hear stories about how they struggle to find a service provider. Then they say ‘I will use mrUsta next time’ and they do. Many service providers also reach out and tell us they are enjoying acquiring new customers online,” says Colak.
Adam Ridgway, 33, British
Managing Partner, Travall
Why read a review when you can watch a video? Today sees the launch of Travall, a free video concierge guide to the UAE for tourists and residents. It features anything you can possibly experience in the country, from accommodation and restaurants to sports and medical services — and most importantly, the culture of the UAE.
Ridgway arrived from the UK six years ago from a strong media and television background and fell in love with the UAE.
The initial idea of Travall hit Ridgway in February last year. After six months of research, the app has been launched on both iOS and Google Play app stores.
“It took about 30 talented staff to help make the app a reality,” he says. Travall allows users to record 15-second video reviews in addition to the usual written reviews. Vouchers and offers users last-minute promotions are also available.
“Every time a user interacts with the application, they earn points,” explains Ridgway, who self-funded the app. Users with a high engagement within the portal will be rewarded with prizes such as spa treatments, hotel stays, flights — even cars.
“Travall was created to offer everyone a chance to see the UAE for what it is — a beautiful place,” he says.
“You can live the same life as you do in your own country here in the UAE — just with a little more respect.”