In our fourth Flat6Labs StartSmart Webinar, Mike Preuss, Co-founder & CEO of Visible.vc along with Marie Therese Fam, Managing Partner of Flat6Labs Cairo, discussed how startups can approach investors virtually but effectively during the pandemic. Mike and Marie highlighted how you can leverage KPSIs and metrics to win over investors, and how it is virtually possible to communicate all of that online.
Cash Has Never Been More King than today
How you will be managing your burn rate in the upcoming months is much more important than how much you are growing nowadays. Investors will be looking at your ability to to maintain cash flow, while still running your business, Mike said.
Send consistent updates
Mike said that in one of their surveys, they have discovered that founders are more likely to get investments if they are consistent with their reports to investors, in fact it increases their chances by %300. During the COVID-19, investors will likely be looking at startups that has a record of maintaining their reports. Most founders can’t raise because they don’t update investors regularly.
Where You See Failure, Investors See Opportunities
From developing multiple relationships with startups and funding many, investors develop this pattern and skill to recognise troubles and opportunities. If an investor sees that your metrics haven’t been met for this month, they might consider funding you or providing you with the resources to help further grow your business. Don’t fall short on sending your reports as much as your investors want, and compare on a month to month basis.
Consistence Cadence Will Help Your Investors Fully Trust you
Instead of micromanaging you into sending reports, setting clear KPIs, and metrics, or having unreasonable demands of you because they don’t really understand the nature of your workflow, you will give them what they want beforehand, so that automatically stops you from getting innumerous requests. In the eyes of the investor, you are an active and an engaged entrepreneur. Consistent cadence also gives you time to reflect on your operations, and what needs to be done or changed.
If You Don’t Need The Money, Don’t Raise The Money
Some bad investors will be looking out to getting the maximum out of your business for little change. You have to be careful while choosing your investors during the COVID-19 pandemic, and if you can maintain your position in the market and operations, then there is no need for it.
Make sure to join our upcoming Webinar on May 5th, 2020 with Roxanne Varza, Director of Station F along with Faten Aissi, Marketing & Outreach Manager of Flat6Labs Tunis. For more information and to register, click here.
In the third webinar of the StartSmart Webinar Series, Amira Yahyaoui founder of MOS, a Silicon Valley based startup, and Tarek Chelifah, Flat6Labs Tunis Senior Program Manager, discussed what it is like to build up a startup in Silicon Valley and how it compares to building one in MENA. Here is the quick recap.
“You don’t need to be in silicon valley to do something great”
To Amira, an entrepreneur should first and foremost be building for the experience, the journey, and changing people’s lives. Entrepreneurs need to realise that wherever they are in the world there are problems that require innovative solutions, which will ultimately change people’s lives, hence, “you don’t need to be in silicon valley to do something great,” Amira said. She added” “the only interesting thing about silicon valley is the technology and the people,” and if you can read books, watch webinars, and listen to podcasts coming from the silicon valley, you can start anywhere.
“Don’t think of just your country, think regionally”
Entrepreneurs are always caught up in building startups with a focus on the local market, but if we try to look for differences between the Egyptian and Bahraini market, we won’t find many. At the very core, our cultures, markets, and purchasing powers are very similar. So “don’t think of just your country, think regionally.”
“Failure is loved cherished, and accepted in Silicon Valley”
One of the things that Amira highlighted was that people in Silicon Valley seem to be very resilient, hardworking, unshaken by fear of failure, and are risk-takers. ‘“Failure is loved, cherished, and accepted in Silicon Valley” because you learn from it, and investors look for people who are hardworking, passionate, and experienced. we won’t find many.
“I believe so much in hunger & scarcity to build”
Amira believes that being an entrepreneur means that you can do lots of things with limited resources. Get creative with the resources you have, and utilise everything you have to its maximum potential. “You cannot build anything in silicon valley if you are not willing to work hard,” Amira said.
“To get to Series A you need to show a considerable spike in the number of users/clients”
After getting your seed fund, don’t expect investors to be encouraged to invest in your startup if you haven’t had a considerable spike in the number of clients/users/customers. This is what investors in Silicon Valley look for, they want to see that your solution is in demand because if it is not, they will not invest. A product/solution is only great if people need it.
“Find people who fit your company culture”
“Find people who fit your company culture,” Amira advised. No matter how much you believe in hiring people with different backgrounds and personalities, working with people who are naturally aligned with your company values, ethics, and goals will get you the best results and it will help your startup grow tremendously. Hire people you want to work with!
If you have any questions, you can reach Amira on any of her social media accounts using @mira404.
Make sure to join our upcoming Webinar on April 28th with Mike Preuss, Co-founder & CEO of Visible.vc along with Marie Therese Fam, Managing Partner of Flat6Labs Cairo. For more information and to register,click here.
During this pandemic, some industries will grow exponentially, while others will struggle to stay afloat. We set out on surveying a sample of 80 active startups to observe how our founders are maneuvering the pandemic, what is needed for survival and for continued growth and scalability, and how should the founders capitalise on the current situation to maximise their revenues, raise their brand awareness, and develop new products and services.
Our startups are in the edtech, agritech, healthtech, logistics, fintech, IT, transportation & travel, and SaaS industries, and it has been noticed that those whose business models depended heavily on legwork (the physical presence of someone on the job), have either shifted their operations completely online, halted their operations for the time being, or continued operating normally due to the nature of the business model that allows them to do so (for example: the delivery of essential products such as medicine, food, water, & sanitary).
52.6% of the startups surveyed required legwork, and as previously mentioned, were the startups majorly affected by the outbreak, whereas the 46.2% percent that didn’t depend on legwork at all, seem to be either operating normally or their businesses are booming.
With around 61% (49 startups) of the startups sampled not operating normally, approximately 81% (40 startups of the 49 startups) have already devised plans, strategies, and even new business models that allow them to adapt to pandemic, which will be discussed shortly. These startups are in the transportation, travel, agritech, logistics.
The rest of the startups are either operating normally or beyond normal capacity because of the pandemic, and they are in the Edtech, SaaS,
The rest of the startups are either operating normally or beyond normal capacity because of the pandemic, and they are in the Edtech, SaaS, Fintech, E-Commerce, and IT industries.
Agritech Around 62% of the startups in agritech require legwork, this is because the nature of the job itself demands the installation and maintenance of tech equipment that aid and makes their processes more efficient. Hence their ability to work at normal capacity is affected.
LifeLab Biodesign (Flat6Labs Beirut): They are delaying the legwork farther into the process until the lockdown is lifted. LifeLab designs and deploys fully-automated, climate-controlled vertical indoor farming technologies.
IoTree (Flat6Labs Beirut): They are currently pushing out new features into their already installed products/services to be capable of retaining clients after the outbreak. IoTree is a wireless sensory network of smart traps that are developed using a deep learning algorithm for the early detection of harmful pests and insects in farms.
Conative Labs (Flat6Labs Cairo): They are rescheduling deliveries and dividing the teams so that the workplace isn’t congested. An IoT-enabled water quality monitoring and alarming system for aquaculture.
The plans that they both have devised seem to be common across many of the agritech startups at the moment, and are helping them mitigate the situation.
The results of the healthtech industry were inconclusive, as our startups have very different business models, and most of them require legwork (60%).
Chefaa & Pharmaklik (Flat6Labs Cairo & Beirut): It is important to note that although legwork was required, some businesses weren’t incapcitated by it as they use delivery services to bring medicine to homes. Chefaa, a Flat6Labs Cairo startup, and Pharmaklik, a Flat6Labs Beirut startup, are examples of startups doing well because of the service they provide. Chefaa have also added a new application feature that allows customers to know all about the latest updates of the COVID-19.
MedMisr (Flat6Labs Cairo): They are offering their services at discounted rates. MedMisr is a digital third party administrator providing medical insurance companies an innovative online paper-free solution with fraud controls.
Logistics, Travel, & Transport
Transportation (e.g. ride-hailing), automobile and travel booking platforms have been reported as one of the most “at risk” industries — however, should some startups adapt to the current changes in customer preferences and consider instead the delivery of groceries or medical supplies, they may have a more sustainable business while ensuring they take their customers best interest into consideration (quality and price-wise).
Transpooler (Flat6Labs Cairo): They are considering using their transport tech platform to cater to a different sector (previously students) which would utilize their services more, while managing their expectations it will be still be difficult to acquire customers and convince them to use the platform. Transpooler helps schools and nurseries to monitor their fleet service and offer parents and students live tracking, speed monitoring and chatting.
Wantotrip (Flat6Labs Tunis): They have convinced their travel customers to retain the amount they already paid as credit for future trips (rather than refund) in an attempt to keep their customers on their platform and utilize it once they’re able to travel again. Wantotrip is an international travel platform offering authentic and themed travel packages around the world for communities or individuals.
Shabeb Delivery (a Presentail company) & Hommy Cook (Flat6Labs Beirut & Bahrain): Startups in the logistics industry with a focus on food delivery seem to be doing exceptionally because of the rising need for distancing and having a contactless life during this period. Shabeb is a quick last-mile delivery service for your business, they have also collaborated with the lebanese food back to deliver food to unfortunate families’ doorstep. With the press of a button, we’re at your door in minutes. Hommy Cook helps cooks make money by selling their home cooked food to thousands of customers through Hommycook.
Hovo (Flat6Labs Cairo): They are using the current period as an opportunity to raise brand awareness and have an increased community involvement.They are buying essentials for the elderly and vulnerable families and delivering it to their doorstep. HOVO is a tech-enabled logistics partner that provides trucks in 20 mins across Egypt.
SaaS & IT
Since almost everyone is, at the moment, dependent on online management tools and services that make work life seamless, it was imperative to see that SaaS startups are doing well and even exceeding expectations. In regards to IT, startups were mostly doing well without any legwork, however, some startups that dedicated their services to restaurants for example, weren’t doing that great.
Untap (Flat6Labs Cairo): Untap is collaborating with high profile companies to manage competitions such as organizing an online regional hackathon for Dubai Future Foundation. They have also launched One Million Arab Coders initiative to find solutions to the challenges posed by COVID-19. Untap is a submission management system used by organizations to easily launch and manage online prize-based competitions and calls for applications.
Nural Technologies (Flat6Labs Bahrain): This startup built around the idea of online management of teams and tasks seem to be doing exceptionally well during this period without much required adaptation.
E-Robot (Flat6Labs Tunis): Have shifted most of the engineers work online. E-robot Software develops IT automation solutions to create web and mobile applications without code writing.
It is normal to see that the Fintech industry is booming during the pandemic, this is largely due to people seeking safer alternatives to banknotes. In fact, some governments are adapting that kind of technology into the national banks. There was one drawback anyhow, which is financial inclusion. Around 25% of the startups that had its primary focus on financial inclusion through their services are operating below normal capacity. It is important to highlight this shift in the industry trend because during these times, it is even more important to find a way to get to those who are unbanked.
Juno (Flat6Labs Beirut): This startup is targeting the unbanked population and has moved most of its operations online, but they are facing difficulties reaching potential customers. Juno digitizes banking focusing on simplicity and personalization to provide financial services.
It’s no surprise that the outbreak will dramatically transform the global higher education sector creating a new normal for how courses will be taught moving forward; in short, it will revolutionize the online learning landscape which can translate to potentially successful ventures for startups in the Edutech industry.
GoMyCode (Flat6Labs Tunis): GoMyCode has already started adapting by selling online via Facebook and decided to kick off their e-learning platform in the coming few days instead of this September as planned. In an effort to popularize their brand and attain their customers, their platform will be temporarily for free and they managed to also create a community of teachers who will be volunteering. GoMyCode is High-end computer Science Education startup with a unique learning experience that leaves lasting impressions and positively impact our students’ lives.
Spica Tech (Flat6Labs Beirut): Spica Tech has started building an online community surrounding their students where they can share their learnings and progress on the online coding and storytelling program available on the platform — which has been since heavily promoted in order to offset offline learning that some of the students were accustomed to. Spica Tech academy teach kids (5+) and teenagers game development as a way to reshape Science, Technology, Engineering, Arts and Math.
On a regional scale, it has been reported that startups which rely more on legwork are facing increased difficulties managing their business, as well as shifting to the digital landscape since they’re not acquiring enough subscriptions or having sufficient equipment essential for creating content.
E-commerce & Shopping
Cleaning supplies, personal hygiene, supplements among others that the everyday consuIt’s no surprise that the startups that are most likely thriving nowadays are e-commerce platforms where they provide and deliver everyday necessities, from products ranging from healthy snacks,mer will find beneficial in order to combat the new “normal” lifestyle they’re leading today.
Mint Basil Market (Flat6Labs Beirut): This startup is focusing on products that their customers will continue to value in the months to come, and they have been lately adding a new immunity boosting collection of products, ensuring that their platform will be able to fulfill the needs of those who are navigating towards a more healthy lifestyle from the comfort of their home since they also include free delivery (while taking the vital safety precautions). Mint Basil Market is an e-commerce platform that offers a wide range of healthy, natural products, from food to cosmetics, and which can be delivered straight to people’s doors.
SeekMake (Flat6Labs Tunis): In order to help the doctors who are facing the COVID-19 pandemic in Tunis, Seekmake has mass produced masks to help protect frontline doctors who are dealing with the pandemic daily. SeekMake is a marketplace linking CNC, laser machines and 3D printer owners with designers and end users.
Dabchy (Flat6Labs Tunis): A Flat6Labs Tunis startup is increasing their marketing efforts to maintain their involvement in communities by pushing out empathetic messages. They are aiming to reach more people by opting for more ads and less organic content in this period of declining sales and unengaged people. Dabchy is a women marketplace that allows women to revamp their wardrobes easily: they can earn money by selling their used clothing online, buy other clothes at discount prices and share their personal style.
Startups that have a B2B business model or B2C but provide non-essential products and services, such as clothing, jewelry and the like, won’t find success since their customers buying power is on an all- time low for luxury products instead shifting their preferences to food, vitamins, everyday home essentials, sanitary products, among other items that will need to constantly purchase for an unpredicted time frame. An additional problem for these startups is that should they decide to promote their businesses, they can come across as tone-deaf to the financial situations of their audience — it’s increasingly challenging for them to keep their business afloat while retaining the praise of their customers simultaneously. However, the silver lining is that some startups can find success should they be able to pivot by changing their business model to selling products that people can benefit from during their home quarantine (such as home gym equipment, books, toys and games).
Our main takeaways
The industries most negatively affected by this phenomenon were:transportation, travel, agritech, & logistics. On the other side of the coin Edtech, SaaS, Fintech, E-Commerce, & IT seem to be doing relatively well.
For all of the startups, it is highly advised that you begin looking for cash & funding, and cutting down costs without affecting the operations of your businesses. It is also important to start working on research and development, perhaps even pivoting to accommodate the current needs of the market.
When it comes to marketing and sales, if you can’t see your startup being of any help to the people, work on raising brand awareness but be sensitive to other people’s pains. It is due time for some good CSR. Also, a good strategy moving forward with your sales is to offer people discounts, giveaways, and free services in return for their loyalty, and sell (mostly) the things that they need the most at the moment.
It is also a good opportunity for startups to start going online, find a way to make their business become mostly cloud-based. If you can do that, you can truly future-proof your startup.
Check our #StartSmart Webinar recaps:
–“How to Take Off Your Startup During COVID-19” here. –“How to Out-Innovate”here.
In the second webinar of the StartSmart Webinar Series, Alexandre (Alex) Lazarow, a global investor and author of “Out-Innovate: How Global Entrepreneurs from Delhi to Detroit Are Rewriting the Rules of Silicon Valley,” and Saleh Abbas, Flat6Labs Bahrain’s Marketing & Outreach Manager, discussed how entrepreneurs in the MENA region are implementing innovative approaches to running a successful startup.
The challenges that startups face in emerging markets are normally comprised of a mix of lack of access to capital, availability of highly skilled talent, and inability to create a structure for the startups, Alex said. Whereas, in Silicon Valley, startups enjoy access to multiple sources for capital growth. This is exactly why Silicon Valley startups scale and grow much faster than their counterparts in MENA, Asia, etc…
“Entrepreneurs around the world have to do more with less”
However, Alex believes, entrepreneurs around the world have more in common than any one would think, but the startup ecosystem, the economy, and the laws and regulations that a startup is bound by is what changes the story.
“Silicon Valley must learn from other centers of innovation”
In the times of the COVID-19, nevertheless, Alex said that Silicon Valley startups who have been privileged with access to growth resources, should take a look at how startups in the MENA are utilising limited resources to grow. Startups in general need to focus on what can be learnt from the pandemic and re-think their business model; focus on what they provide, and focus on sustainability.
“Use the pandemic to hire remote talents”
The pandemic is a great opportunity for startups to realise the potential of hiring remote talents to grow and expand their business operations. As Alex put it, “if you are capable of building your business remotely, you are also building the muscle that will support your local, regional, or global expansion.” Hiring remote talents also gives you access to areas of expertise that might not be available in your ecosystem at a lower cost even.
“Startups in the frontier ecosystems need to think globally”
Alex elaborated that startups in growing economies need to think of how their startup can expand globally or regionally when they are just starting out. It is important to create a solution that could be adapted to different cultures and economies because it will facilitate your growth. He highlighted that most of today’s unicorns had going global at their core from the very beginning. Entrepreneurs need to think about how you can build teams that communicate efficiently across the world, and how they can build that global muscle from day one. Also, the pandemic is enabling entrepreneurs to reach out to global investors without the need to travel. This is a chance for them to raise money and approach remote investors.
We highly recommend Out-Innovate as one of the top reads in the VC/Startup genre , you can get yours… here.
Don’t miss our upcoming Webinar on April 21st with Amira Yahyaoui founder of MOS, a Silicon Valley based startup. For more information and to register click here.
Two prominent figures in the entrepreneurial industry, Christopher Schroeder, a global investor with 20+ years of experience in entrepreneurship and Hany Al Sonbaty, Flat6Labs & Sawari Ventures Co-founder have hosted our first Webinar on “how to take off your startup during COVID-19 Outbreak. Here is a quick recap.
Harbour Your Cash and Reflect
The first advice we got from Schroeder for startups is to “harbour your cash.” Meaning that you as startup founders need to focus on cutting down costs if you are not generating considerable revenue, so that you will be capable of surviving and prospering after this period ends. Another point of the discussion was that some startups might struggle with raising money, or they will be met with “bad” venture capitalists who will try to take advantage of the situation, and it is imperative that you avoid them. He has also mentioned that it is important for founders to continuously reflect on what they are learning, and use it to develop their business moving forward.
Questions to ask yourself from Chris:
1) What do we believe now that we think might be different in the future?
2) What do we believe now that will be true of all times?
3) What are three things that we now know, we should have done differently?
Transferring Company Culture Virtually Isn’t Easy
Amidst all this, Schroeder has also stressed that transferring company culture, virtually, is not going to be easy. You have to have a very structured and clear plan for your team during this period on what needs to be done, how you are going to do it, and what means of communications are required.
The Pandemic Heightens the Need for Inclusive Services & Products
As we’ve all seen, this pandemic and the move to online communication, transactions, consultation, etc… has deepened the need for our economies to be inclusive of those who don’t have access to such technologies. Entrepreneurs should cease this opportunity to create solutions that bring inclusivity to a new level, Schroeder added.
Investors Are Not Looking for Crystal Ball Answers
On another topic, entrepreneurs should be aware that when approaching investors, those investors are not looking for “crystal ball answers,” they want to see determination, an ability to adapt and process new information that will benefit their business.
The Pandemic Has Opened People Up to The Virtualness of Things
Talking about the industries growing rapidly during this period, he mentioned that online education, fintech, and communications tools are growing massively, which could possibly have implications on how we operate after the pandemic. “The pandemic has opened people up to the virtualness of things, and to make use of them to make things more efficient,” as worded by Chris.
Read Books That Enrich You
Schroeder had also few tips on utilising the #StayHome policies that many governments and businesses have adopted by recommending that you read when you can. He said that it requires both discipline and trading off other leisures to make it work, and he outright advised against reading books like “how to survive pandemics.” Instead, entrepreneurs should be focused on reading books about how to navigate a business/startup, how to scale it, and basically anything that could enrich you with a new perspective on managing your business.