Infrastructure and foundations are being build-up
A very strong point for UAE, Qatar and some other gulf countries to become strong innovation hubs is the investments these countries have made and are still making in connectivity and communication. With much of today’s business and value chains having turned digital, a good broadband connectivity is essential for any business to grow or even to get started. UAE and Qatar have both heavily invested in fiber deployment over the last couple of years and are now rapidly deploying LTE as well. The connectivity quality has rapidly increased and this facilitates communication and also secures a quality access to the cloud where many of the enterprise resources are located. Similarly regional airlines have also transformed the gulf states into major hubs between east and west cutting distances and facilitating business.
In addition education is on top of the agenda for all gulf states. This means also that local talent is fostered and developed. Major Business schools have established in Dubai and Abu Dhabi. So there is a good availability of business people, the shortage today would probably more reside in areas like software development, but these needs could possibly be off-shored to nearby india or some of the arabic countries like Egypt.
Incubators and accelerators are emerging
A number of incubators and accelerators are appearing in UAE and these are great places to launch your company if you have already a ready product and you only need the right coaching and relationships to get your business on orbit. I recently attended the innovathon in Dubai organized by DP World and Turn8, it is great to see this type of event appearing. For the selected teams, the promise is to help them to take their products from concept to launch in 120 days. Similar proposition is offered by In5, an incubator located in Dubai Internet city. Seed funding, coaching, office spaces, go-to-market support is part of the package. The incubators expect in return a certain equity in your company. In order to leverage these emerging infrastructures for accelerating your business the important thing is to be well prepared and almost ready to launch.
Status of the startup scene… something is still missing…
What seems to be still missing is an environment where people get support to develop early ideas and develop their business plans or even get together to share ideas and provide their skills to other entrepreneurs.
Having spent much of my life in Sweden, I want to compare this to the experience I had in Sweden. I exposed one of my ideas to the Stockholm innovation and growth initiative (STING) program in 2006. After the initial pitching and selection based on project description and one-on-one interviews, our team was selected to join the program. That program was setup a bit differently where we got 4 months of training with no equity required. The focus was entirely on business planning and value creation. In addition the program was setup so that it would also suit people that currently have a job or are studying (which is probably applicable to many potential entrepreneurs in UAE). We had 4-6 hours coaching a week, plus equal amount of homework for the next session. Program ended with a monetary prize for the winner and investor pitching for all the participants.
Beside this early support where you are still in exploration mode, I am also missing the networking platforms to explore ideas and meetup with like-minded people. I haven’t seen much meet-ups or google hang-outs. The business groups are often more focusing on networking for immediate business opportunities.
When it comes to software development and innovation, I think the appearance of hackathons and the platforms supporting these hackathons is also missing in UAE today.
Cost of living is still exhorbitant
On the downside, one of the main issues to setup a start-up here is the actual cost of living. If you want to start you business and cannot rely on somebody to fund you, then it will be difficult to get started. With low-end housing in UAE today at 100-150K AED per year and equal amount needed to cover all your cost of living, it means that you need to have a minimum yearly budget 0f 200-300KAED (60-90k USD). Of course that is not the case if you have another family member covering for you or if you are student or if you are willing to compromise quality of leaving. But you need you will have to get this budget somehow, since these costs are normally not covered by the incubator.
New platforms and models for Abu Dhabi, Dubai and UAE?
So here I want to throw out some ideas on what could help UAE to accelerate its innovation capabilities and i would love to get your feedback on these:
- Develop short coaching programs to help entrepreneurs develop solid business plans for their ideas. Probe them well enough and develop ideas to create enough value
- Develop partnerships between accelerators and major companies present in UAE to fully sponsor project teams, i.e. to also cover cost of living in exchange for higher equity.
- Find a number of sponsors to setup regular Hackathons to stimulate the startup scene
- Why not exploring complete new approaches like crowdsourcing? For instance develop a similar platform as kickstarter but based on Islamic funding only.
- Virtual spaces to hang-out, offer your skills to other entrepreneurs, expose your ideas, build-up your team.
Probably my view is a bit biased since it is mainly looking at software innovation, but I would love to hear your opinion. What do you say? Do you want any of these ideas implemented in UAE?