SOLUTIONS of ENTREPRENEURSHIP
The entrepreneurship
landscape in the region is booming. There are bigger investments, more
startups, more innovative ideas and more courageous entrepreneurs.
“It is an exciting time to be an entrepreneur in the MENA region,” as Mike Butcher, Editor At Large at Tech Crunch, said while moderating at Arabnet Beirut 2014: Entrepreneurship and Investing in MENA. (MENA: Middle East and North Africa).
“It is an exciting time to be an entrepreneur in the MENA region,” as Mike Butcher, Editor At Large at Tech Crunch, said while moderating at Arabnet Beirut 2014: Entrepreneurship and Investing in MENA. (MENA: Middle East and North Africa).
The lively discussions
during the forum recognized the rapid growth in the entrepreneurship scene and
expressed some excitement. However, the seasoned players in the field spoke of
difficulties and obstacles that are still holding the market back from reaching
its potential.
1. Lack of funds
Despite the notable growth
in investments, funds invested in startups are still small. Talented
entrepreneurs still struggle with raising funds and gathering interest in their
projects. SME’s have even bigger problems with raising growth funds after
starting, having to limit their capacities below their potential.
2. Lack of a robust
ecosystem
The ecosystem for
entrepreneurship in the region is still struggling. Businesses and
entrepreneurs are faced with mundane, unforeseeable obstacles because they
don’t have an fully-functioning ecosystem that they could rely on for support
of the talent. Almost all the time, there’s a link, or more, missing from the
chain.
3. Scale of markets
Startups in the region
operate in relatively small-scale markets. Companies that are looking to
monetize on ads, for example, are faced with how narrow the market is.
Competition among startups is making the problem even worse, preventing them
from expanding to newer markets in the region.
4. Lack of cooperation
Cooperation among startups
and SME’s can provide grounds needed for overcoming many obstacles. It could
help with marketing problems, provide larger markets, bridge gaps in the
ecosystem, and, more importantly, secure a much better access to information,
which would be a huge step forward for entrepreneurship in the region.
5. Regulatory systems
Regulatory systems in MENA
are still very from business friendly. Setting up a company in Beirut or Amman
might take as long as a month, whereas starting a business in USA could happen
in 24 hours. Struggling with regulations, in many cases, drains entrepreneurs’
energy and time, and make investors reluctant to support ventures.
6. Political turmoil
The unstable political
situation in the region is a bigger factor in investors’ hesitation to enter
the market of entrepreneurship. That only applies, however, to investors who
don’t know the market well. Investors with experience in the region trust the
ability of entrepreneurs to work around political hardships. The regulatory
obstacles mentioned above, according to several panelists, are a bigger
problem.
7. Poorly trained entrepreneurs
Entrepreneurs in MENA don’t lack talent or innovation,
but they lack training on different aspect of business. Great ideas may not
raise funds due to bad pitches. Startups with huge potential may shut down
because of inadequate management. Training and mentoring is a very important
component missing from the entrepreneurship ecosystem.
8. Weak planning
Most entrepreneurs in the region make the mistake of
raising funds just enough to start, whereas any startup should have enough
funds to survive for 18-24 months—the time usually needed for turning up a
significant profit. Entrepreneurs in MENA tend to make another big mistake;
they raise funds for what they have today when they should raise funds for
where they want their startup to be in a year or two.
Solutions
Having these hardships and
obstacles, among others, does not mean there is no hope. New initiative, such
as circular 331 by the Central Bank
of Lebanon and the approval of assigning 7
billion US dollars to invest in startups in Kuwait, are a great boost to
the entrepreneurship landscape in the region.
The panelists stressed on
the importance of cooperation among investors, entrepreneurs, startups and
SME’s and called out for transparent co-investments among incubators and
accelerators.
http://arabnet.me
Also
read: Turning your Hobby toBusiness, The Challenges of Entrepreneurship, Levelling up, Profit and LossAnalysis, Planning Ahead and Creativity.
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