Risk takers are in the West, techies hail from the East, and money is in the middle.
That’s the world according to Nader Ajami at Ogilvy & Mather Riyadh, the Saudi branch of one of the largest global marketing firms.
Saudi Arabia and its Gulf neighbors have been behind many of Silicon Valley’s bravest inventions – but have been less bold in their own back yard. So, as oil – the source of the funding – dries up, why not get more creative at home?
Some of the Gulf states do seem to be making a push to encourage well-educated and globally minded nationals to become entrepreneurs. Universities like NYU Abu Dhabi and the King Abdullah University of Science & Technology in Saudi Arabia recruit top professors from all over the world to their campuses.
For social media geeks, Saudis represent the world’s most Twitter-obsessed population per capita – with high rates of smart phone usage and relative wealth adding to the allure for new ventures. It’s part of the reason 70% of entrepreneurs in the Middle East and North Africa picked the Gulf as the best place to start a company.
Centers like Saudi Arabia’s National Entrepreneurship Center, Tamkeen in Bahrain, and Enterprise Qatar have cropped up, offering training, mentoring, and even financing to aspiring young founders. Some governments, like the UAE’s, have also begun to strip away onerous requirements such as demanding that locals hold a majority stake in designated free zones.
This is unclear, and needs clarified. Is she referring to free zone companies? Please cite source of any changes or ‘stripping away’ to UAE legislation.
Where Next Ma?
So, will the next Steve Jobs or Jack Ma be an Emirati? There’s a mountain to climb first.
Bureaucratic sluggishness and over-regulation is part of the problem in a corner of the planet where, instead of bankruptcy protection, failing entrepreneurs risk jail for bouncing a check.
But the deeper issue is cultural: an inherent aversion to risk.
As any entrepreneur worthy of their Y-incubator stint will testify, risk is an essential element of launching a business. That concept might not come naturally in Qatar, where a recent study found that only 13% of youngsters wanted to be their own boss and 58% favored working for the government In America, 48% of youth view entrepreneurship as the most attractive option.
“Most parents still advise their graduating kids to seek out only stable jobs and avoid the risks of private business,” Aiman Kabli, the Saudi founder of AK Creative Solutions, a startup consultancy in Dubai, told Frontera.
Investors are guilty of the same bias, making the search for seed money exceptionally difficult for early stage ventures throughout the Gulf.
“When presented with a valuation of several millions for a company that’s purely digital, for example, or something they can’t touch, feel, weigh, or measure, they tend to resist,” said Nada Zagallai, Chief Executive Officer of GlamBox.ME, a subscription beauty service based in the Emirates. “In their minds, those same millions can be invested in tangible assets, or bonds, or any other more secure channel, yielding a relatively guaranteed, although maybe lower, return.”
Appetite for the familiar extends to the personal relationship between investor and inventor. “We still do things very tribally, even though we are a modern nation with sophisticated investors,” said Wafa Alobaidat, the Bahrain-based founder of PR and design agency Obai & Hill. “They still don’t like to take risks with people they don’t know.”
