Startup guru Christopher Schroeder is a firm believer in the MENA region’s entrepreneurial spirit, which he says is inspiring young, tech-savvy Arabs to leverage the little they have to shape a better future for themselves and those around them.
By Dina al Wakeel
In his book Startup Rising: The Entrepreneurial Revolution Remaking the Middle East, American entrepreneur and venture investor Christopher Schroeder focuses on the entrepreneurs he has encountered on his travels around the region. Not only does he mention them by name, including several Arab female entrepreneurs and their role in economic development, but he also showcases their startups and the idea behind each one of them.
Despite the many economic and security challenges these remarkable young entrepreneurs face in getting their projects off the ground, Schroeder still writes in his book’s afterword that “every entrepreneur and startup I described … is not only continuing to fight, but they are succeeding as well.”
Through your frequent travels to the region and familiarity with the startup world here, what do you think differentiates Arab entrepreneurs from their peers in other countries?
One of the things I’ve come to realize is that when you put great entrepreneurs from anywhere in the same room, they are often more alike than any border. They think similarly, speak similarly, have an urge to solve problems, have hyper focus on great product, etc. Access to technology has merely unleashed millions more at greater scale than ever before. Having said this, the Middle East—like any region—has its own unique opportunities, challenges, and cultural uniqueness that have an exciting voice of its own.
But why do you care about the Middle East’s entrepreneurship and startup scene and when did that begin?
I care about individuals actualizing anywhere, which is why I have loved being an entrepreneur and supporting them. Being exposed to the region—a region so closely associated with my country too often with difficulty—I was so stunned at all that was going on, never shown on CNN, that I became fascinated. I realized it was a lens on what is happening everywhere in the world when people have ubiquitous access to technology. But, I must confess, the more time I spent there, the more I simply fell in love with the region.
What are the most prominent challenges they face, and are they the same that say American entrepreneurs face?
All entrepreneurs face similar challenges of their own psyche—can I do this, will I do this?—and of finding the best ideas, money, and mentors. Beyond the obvious political and societal unrest in parts of the region, rule of law, [including] allowing ease of people, ideas, products, protecting capital, etc, are real challenges. Infrastructure, particularly inadequate education for twenty-first century skills is hard. But these are true in most emerging growth markets and, of course, even entrepreneurs are trying to solve these, not waiting for traditional, top-down institutions to “get to them.”
Access to capital remains an issue in the region for most entrepreneurs, how do you think they can overcome this enormous hurdle to scale?
Risk capital is absolutely a challenge, though we are seeing significant improvement in the early stage (angel) and at the established stage (profitability, near private equity kinds of assets). The middle—A/B rounds—where entrepreneurs get that $1 to $5 million to really scale is too hard. I see players now raising funds for this, and it’s a gaping opportunity.
Do you think there’s enough innovation in the region, or do most end up becoming copycats?
I, of course, have a problem with piracy but hate the word “copy cats.” I call them “improvisers” in my book. They take something that works elsewhere and make it relevant for their regions. In the early stages of ecosystem development, it always starts this way; think Yandex in Russia, Mercado Libre in Brazil, Ten Cent or Alibaba or Baidu in China. It makes perfect sense to break through the risk aversion in early markets. Success breeds success. Remember, also, that “innovation” isn’t just the bright shiny new thing. If you live in a community that never had a phone, and now everyone has a mobile device, that is innovation. And, by the way, we can bet that all these mobile-first societies will have global innovation soon. I watch crypto currencies closely on this, as I believe they will be more likely to take off in emerging markets.
Have you invested in an Arab startup yet? If not, are you interested in doing so?
In writing the book, I decided I’d pick no favorites and ask nothing of the entrepreneurs there, so I have not invested directly. I have since joined the investment committee of the new Wamda A-round fund, and am plotting new activities shortly.
Are you providing any mentorship to any Arab entrepreneurs? How is mentorship helpful and how do you choose your mentees?
Perhaps by the hundreds, which means I’m not very scalable right now. It helps me when they have been filtered by people and groups I trust: Wamda, Oasis500, Flat6Labs, and Endeavor. But I also can tell at conferences and in emails people who really want it, and try to help where I can.
Do you think there are enough opportunities in the region for young creative entrepreneurs to build their businesses?
Wherever there are problems needing to be solved, wherever there are people passionate about bettering themselves, there is mass opportunity.
Can technology be a solution to some of the region’s ailments?
It already is. People get hung up even on the word “technology” thinking it is some high-flying, upper crust thing. As I said before, even a basic mobile phone at scale changes entire societies because it opens up the ability to reach, engage with, collaborate, and understand thousands and millions of others. We don’t talk about electricity anymore as a thing; we assume it. But once it was the crazy new technology. The tools that are available to us, and improving exponentially, will be in the hands of almost everyone within a decade. Think about the ramifications on health care, education, economic growth, etc. Think of what Korea was like 30 years ago as compared to today, and any society with the will can look more like that, in their own ways, in a fraction of the time now. Certainly the money and resources are there.
How do you foresee the future of the region’s startup world?
With tremendous hope if governments, private sector, and investors embrace it. Though it will happen with or without them, they can affect speed and scale.