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.
Legwork: The startups that required the physical presence of someone to complete the service/product delivery/installation.
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.
Industry Breakdown
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.
Healthtech
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.
Fintech
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.
-Edtech
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.
To stay updated and find out more about Alex Lazarow check out his website 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.
Read his full Linkedin article here about the best books to read.
Make sure to join our upcoming Webinar on April 14th with the renowned global investor and author of ‘Out-Innovate’, Alex Lazarow. For more information and to register click here .
Throughout decades, many entrepreneurs, investors, acclaimed businessmen/women have talked about how perseverance, resilience, passion, and drive will get your company off the ground. While working hard and having a belief in your startup will get you far, working smart will get you further. To work smart, you need to identify the main pillars that help you sustain, grow, and scale your startup from idea stage to seed-ready stage. With that said, here is Flat6Labs 2019’s roundup of the best tips from all over the MENA region on how to get your startup kicking.
Choosing the right team is essential to your business’ success. You could be a brilliant entrepreneur with an awesome business idea destined for success, but if you don’t have the right people on your team, you won’t go far. Based on CB Insights report on the top reasons startups fail, which was conducted on 311 flamed-out startups, 23% of startups fail due to not having the right team — it’s also the third most common reason for startup failure.
Continue Reading: The Five Types of People You Need to Hire for Your Startup.
There are a number of catalysts that could elevate your startup and improve its prospects when it comes to scalability; and standing the test of time and lots of glorious examples, is networking. In a report by Forbes.com, their highlighted research concluded that on the way to entrepreneurial success, networking is crucial for 78% of the startups. So yes, it does act as an undeniably strong force on the way to shaping a well-rounded future for your startup, which will likely entail a network of friends, mentors, investors, professionals for hiring, and advisers.
Continue reading: 5 Tips on How to Use Networking as a Limitless Channel of Possibilities.
With your innovative services or products trying to enter the space of one thriving startup scene, it is crucial to know where your startups’ best interests lie; and what is the best course of action that will revolutionise how people live daily through your tech-based solutions. Identifying what you need early on, and settling on partnering with those who can help you propel your startup comes a long way; especially, if you chose Flat6Labs, and the reasons are many.
Continue Reading: Four Ways A Strategic Partner Can Help Your Startup.
You’ve put in your all to kickstart your startup and now you’re after investors who can share in the vision you have for your business. A great pitch goes a long way in securing investments and the way you present can make or break your chances. If you’ve been to one of Flat6Labs Bahrain’s Demo Days, then you’ve probably seen that we do know a thing or two about giving an exemplary pitch. Here are some of our tips to pitching your way to securing investments for your startup.
According to CBinsights.com, running out of cash and the lack of investor interest in a startup are some of the common hurdles that stand in the way of early-stage startups. With Flat6Labs expertise in the startup ecosystem over the past 8 years, Flat6Labs’ CIO, Dina el-Shenoufy, and our Managing Partners and Directors from our offices: Flat6Labs Beirut, Flat6Labs Bahrain, Flat6Labs Cairo, and Flat6Labs Tunis, discussed how startups can maximize their potential and chances with local, regional, and even international investors. They have thoroughly examined, through both experience and knowledge, the conditions and preferences of investors when they are fishing for innovative, scalable, and all-around amazing startups. And, with the number and magnitude of events we hold each cycle for our startups, we’ve demonstrated our ability to give each of our startups multiple chances to meet with and actually secure deals with investors. Mainly through our networking events, pitch nights; our speed-date investor mixers; and through the Demo Days, which always hosts a number of local, regional and international investors and even mentors and government officials.
Continue Reading:Six Top Tips to Get Investors Invested in Your Startup.
In 2018, the World Bank published a research that detailed how MENA’s GDP could have increased $1 trillion over the “predicted” level if the gender gap was narrowed down the past decade, and if more women were capable of taking part in the economic growth of their respective communities. With around 48% of MENA’s population consisting of females, and only 28% of adult women taking part in any kind of economic development, MENA has a goldmine of untapped women potential that could indefinitely help economies of different countries. It even stands truer, as Dina El-Shenoufy, Flat6Labs’ CIO put it in the World Bank’s Annual Meetings “Today, in my part of the work, less than 10% of the startups are launched by women. The economies would basically double, if we fix that disparity.” El-Shenoufy’s testament is at the core of what Flat6Labs stands for when it comes to supporting women entrepreneurship all over the region. We believe in women’s ability to change economies of countries. We’ve been supporting different female founders establish, grow, and scale their startups across the region through Flat6Labs. Also, the Flat6Labs powered initiative, StartEgypt, has been taking the helm of inspiring, encouraging, and educating women in Egypt to innovate. However, this is not the tip of the iceberg yet because with more women entrepreneurs, women’s impact extends economically, socially, and culturally.
More women entrepreneurs means more innovation
There are often two reasons why someone would start a startup, and it can be either the potential of an untapped opportunity or the potential of surviving poverty and unemployment. In a recent study on women entrepreneurship in the MENA region, Hala Hattab found that the general consensus is that women are driven to take part in entrepreneurial activities because of the existence of opportunities, especially in Egypt. Since we’ve already mentioned that women compromise 48% of MENA’s population, this means that with more women entrepreneurs there is a much higher chance for innovative products and services, and room for improvement in every industry. This will benefit consumers, businesses, governments, and economies of countries at large.
Women-led small businesses tend to create an overflow of job opportunities
If more women entrepreneurs were to start venturing with scalable businesses, more job opportunities will be created, and the GDP of countries affected by such growth will increase. In one research, it has been forecasted that if women were capable of starting such businesses, millions of jobs will be created; Dell’s research further elaborated that in the U.S. alone 15 millions jobs will be available for the unemployed. Hattab’s research on the employment rate in women-led small businesses in MENA, indicated that the highest average of employment rates exists in Jordan, Lebanon, and Yemen with around 20 employees per startup; a big number considering that the businesses are still at their infancy.
Women inspire other women
Women inspire women. Independent, powerful, and socially impactful women can inspire women to start their own businesses, and be a strong force in any economy. StartEgypt initiative has roamed 17 cities over the past years, and has trained and counseled 1,000 women entrepreneurs around Egypt through 14 Female Founder sessions. During such sessions, StartEgypt brings successful entrepreneurial models to inspire Egyptian females all across Egypt, and they also offer workshops for female entrepreneurs, and provide them with access to their incubation program. Also, StartEgypt’s ‘Inspire’ which was held 42 times, saw about 6,000 females attending it. Last but not least, StartEgypt has welcomed 20 female founders to their incubation program the past cycles! When women are inspired they can lift themselves up from poverty, they can fight unemployment, and their independence will evidently inspire other women.
Women are more likely to invest their revenues to further extend the growth and impact
A research conducted by the World Bank, found out a pattern where women are more likely to invest 90% of their income in supporting their families and communities. To further elaborate, a Goldman Sachs report states “enabling women, particularly as entrepreneurs, benefits future generations because women tend to spend more on their children’s education and health, which should boost productivity as well.”
According to CBinsights.com, running out of cash and the lack of investor interest in a startup are some of the common hurdles that stand in the way of early-stage startups. With Flat6Labs expertise in the startup ecosystem over the past 8 years, Flat6Labs’ CIO, Dina el-Shenoufy, and our Managing Partners and Directors from our offices: Flat6Labs Beirut, Flat6Labs Bahrain, Flat6Labs Cairo, and Flat6Labs Tunis, discussed how startups can maximize their potential and chances with local, regional, and even international investors. They have thoroughly examined, through both experience and knowledge, the conditions and preferences of investors when they are fishing for innovative, scalable, and all-around amazing startups. And, with the number and magnitude of events we hold each cycle for our startups, we’ve demonstrated our ability to give each of our startups multiple chances to meet with and actually secure deals with investors. Mainly through our networking events, pitch nights; our speed-date investor mixers; and through the Demo Days, which always hosts a number of local, regional and international investors and even mentors and government officials.
1. Make the distinction between an institutional and angel investor and what each looks for.
In order to lay ground for what comes next, Flat6Labs’ CIO, Dina el-Shenoufy, highlights that “first, a startup must make the distinction between an institutional investor and an angel investor because each offers different amounts of investments, has different goals, and even sets a different criteria for the startups they decide to fund.” This will enable you as a startup to know how you are going to attract an investor to your startup.
“Institutional investors measure the strength and potential of a startup by its ability to show concrete results, and by having a vivid plan of the future.” — Flat6Labs’ CIO, Dina el-Shenoufy
El-Shenoufy added that institutional investors often look at the idea before anything else. This entails how innovative the technology the startup is adapting or even creating; the scarcity and need of the product/service in the market; the breadth of the market, and the lack of competition. Such investors also look deep into how the team is structured: the passion, harmony, experience, motivation, and commitment, with traction and everything else coming next. “Institutional investors measure the strength and potential of a startup by its ability to show concrete results, and by having a vivid plan of the future,” el-Shenoufy says.
“Angel investors look for companies that they can relate to, believe in, and wholeheartedly support while still understanding the risks” — Flat6Labs’ CIO, Dina el-Shenoufy
Dina further elaborated that angel investors look for companies that they can relate to, startups that they can absolutely believe in and want to support. Such investors don’t necessarily have to be experts in your industry, but being a good storyteller can make the difference if you really want to get their funds. Remember that being capable of selling your idea to an investor who might not know anything about the industry you are targeting is no easy task. Articulate your solution in layman terms, whether it is a service or a product, and it will eventually help the investor understand how it helps solve a major problem. Such investors often understand the risks, but they are willing to fight with you for what you and they believe in.
2. Set a clear and realistic growth plan
Another thing that both kinds of investors look for is clear growth plans. El-Shenoufy said that investors do not want to see unrealistic growth and scalability plans. If you’ll be saying that you’re getting 1000 customers next month, tell them exactly how you will be utilising your resources and funds to do it. Investors want to know how you will be making revenues out of selling your product/service and they dislike ambiguity. They need to see that you will be capable of using their investment to generate revenue and scale your business beyond the trajectory you were already on before the funding.
3. Have all things considered: the industrial, economic and social fit
“Angels typically invest in something they find interesting or something they can help to scale or monetize further. Also, some investors have specific preferences when it comes to the economy they are targeting. For example, they would rather invest in Europe over the middle east or perhaps the USA over Europe. So many times the economic situation where the startup is domiciled can aid or hinder the startup’s plans of scaling and growth if the investor is targeting a different economy. In addition, investing in a startup is like investing in a person. You want to understand what they have been through, and how they’ve been educated before you invest. Angels sometimes invest in the person more than the idea. Ideas are easier to pivot, it’s harder to change a personality.” — Ryaan Sharif, Flat6Labs Bahrain’s Managing Director
Some investors prefer specific markets, industries, economies, and specific types of founder personalities. In order to make sure you don’t waste an investor’s time or even your own, research the investors who will be showing at the event. If you are attending our Demo Day for example, our application (download through Play Store & Apple Store) is a great tool to see the people attending and even chat with them. This way you can know who exactly you want to find and talk to about your startup. Find an investor who is interested or works in the same industry as you; an investor who wants to take your product beyond the borders of your country if your growth plans aligns with his/her goals, and an investor who is willing to invest in you because of what you stand for!
4. Highlight your ability to generate revenue and traction!
“Seed funds review and assess promising businesses, and most likely, they choose one startup out of each 100 startups. They seed to add value and capital to the companies, but in return, they want founders who have brilliant execution, and have already have proven something with their traction and their future plans! Investors finance people who are constantly talking to their real customers and understanding their needs. They invest in hard workers. It’s fundamental. It’s also about cultural and personal fit, shared vision, and trust.” — Walid Triki, Flat6Labs Tunis’s Managing Partner
While often overlooked by idea-stage startups, startups that have gone far and beyond to execute a project must always be diligent and hardworking when it comes to improving their sales. This means, doing proper market research to ensure that the product aligns with the market needs and pivot when needed. Understanding that traction is an important deciding factor when it comes to your startup’s success will accelerate your startup, and help you acquire investments. Always remember to weave in your best figures into everything you say, give the investor something that shows how your product/service is very promising.
5. Your team is your biggest asset, nurture and invest in it.
“Your team is your biggest asset. Like any asset you need to nurture it, grow it and invest in it, so you can monetize it. Your team should be enthusiastic, ambitious and speaks the same language. The harmony of your team is key to capturing investors’ interest” — Marie Therese Fam, Flat6Labs Cairo’s Managing Partner
Besides your team being the catalyst of all good things, crossing milestones, and successfully achieving your growth plans, the investor will be looking for a team of different competencies. The investor wants to see a capable team that is diverse in the areas of expertise, but one that works in harmony to develop products and services.
6. Have an exit strategy in place
“ Investors always think about the exit strategy of the startup, and if it has the potential to be one of their top quartile portfolio companies. In addition when we ask founders about their exit strategy we understand their level of commitment to building the business, their level of flexibility and if they thought about possible exit scenarios.” — Danny Maalouly, Flat6Labs Beirut’s Managing Partner
Investors always look for the potential of an exit strategy and set the criteria for their exits when they are hunting for startups to invest in. In turn, they also measure the startup founders flexibility with exiting if an acquisition deal is on the table.
Being capable of understanding what the investor looks for in a startup will help you form proper strategies for when you approach investors, and will also help you target specific investors who are more likely to support your startup.
Choosing the right team is essential to your business’ success. You could be a brilliant entrepreneur with an awesome business idea destined for success, but if you don’t have the right people on your team, you won’t go far. Based on CB Insights report on the top reasons startups fail, which was conducted on 311 flamed out startups, 23% of startups fail due to not having the right team — it’s also the third most common reason for startup failure.
During the Flat6Labs Cairo 4 month acceleration program, we help our startups find the right candidates for their business by co-hosting a talent match-making event with one of the biggest online recruiting companies, Wuzzuf; and by offering them sessions on how to acquire the best talents and how to build a strong team delivered by top industry experts. Our applications are open all year long — you can apply on our website.
We strongly believe that creating a company from the ground up and growing it to a full-scale enterprise takes a well-rounded team that can overcome the many obstacles that come their way. To make sure that your company moves in the right direction, never loses focus, and grows to its full potential, there are certain personality types that you always need to have on your team — from the get-go!
1- The Visionary
Because of the magnitude of their thinking, they’re often entrepreneurs themselves. They are the masterminds that can come up with the most world-changing products and services. They’re always ahead of the curve in terms of, identifying potential problems and coming up with solutions that can change the course of humanity.
Even if you already have a big vision for your company, you still need to have a visionary on your team. They will help you create the right strategies to achieve, finalise, and realise your vision.
One of the best examples of this type of personality is the co-founder of Apple; Steve Jobs. Before Jobs came back to Apple and during the final quarter of 1996, Apple’s sales plummeted by 30 percent. The brilliant entrepreneur was able to save Apple from being on the brink of bankruptcy by decreasing the number of products by 70% and focusing only on four main products. He saw that focusing on quality and innovation rather than quantity will radically change the company’s future. One year later, Jobs’ vision did pay off, and the company turned a $309 million profit.
Good Habits 1: Train yourself to innovate every day.Grab a notebook and write down three ideas on how to develop your product.
2- The Social Butterfly
They are socially dynamic, networking, charismatic, and personally gregarious. A social butterfly is an extreme extrovert brimming with energy and confidence, who truly believe in your vision for the company and want to play an active part in helping you achieve it. They are exceptional marketers who know your solution well enough and understand its business needs.
A great example of this type of personality is the youngest self-made billionaire; Kylie Jenner. The famous Kardashian was able to build a one billion dollar cosmetic brand without manufacturing anything! Kylie Cosmetics is only responsible for marketing through social media, and other companies manufacture, package and distribute the products. In its first 18 months, the company made 420 million dollars in sales. All that success came mainly from Jenner’s social media followers. She has 145M followers on Instagram and a massive audience on Snapchat. The estimated value of a single post is $1 M.
Good Habit 2: Find a hobby or an activity that’s social. It’ll be easier to expand your social circle with people who share your passion.
3- The Ultimate Optimist
Running a business comes with its pressures and challenges. When things are not going your way, it’s easy to lose hope and look for the easy way out. That is why you need an ultimate optimist on your team.
As the name suggests, these are extremely positive people who stay calm under pressure and see the brighter side of things even in the darkest of moments. They have belief and conviction in the abilities of your team, and know that every obstacle is only a stepping stone for greater success.
Gary Vaynerchuk (or Gary Vee) is the perfect example whenever we talk about optimistic entrepreneurs. Vaynerchuk and his family immigrated to the US from Belarus in 1978, and he lived with 8 family members in a studio apartment in Queens, New York. Today, the 43-year-old runs a multimillion-dollar digital marketing company that he founded. The company’s clients include Fortune 500 companies like General Electric, Budweiser, Toyota, Revlon, and Unilever.
The brilliant entrepreneur succeeded despite his humble beginnings and despite the fact that he was a D- and F-student in school. He attributes that success to his unshakable self-confidence and optimism. “I do believe that blind optimism, naïveté, and self-confidence are enormously delicious traits that allow you to win more often than you lose.” Says Vaynerchuk on one of the episodes of DailyVee, a full-blown vlog documenting his life as a CEO.
Good Habit 3: Notice Negative Thoughts. Becoming aware of your negative thoughts and how often they occur will help you realize when and why you are negative. Maybe you’re more negative during stressful situations or when you’re feeling emotional. Being mindful of your pessimistic thoughts will help you pinpoint what’s causing you to feel negative.
4- The Hacker
They are your go-to people whenever you want to find an innovative solution. They know shortcuts to do things more effectively, and they understand your business from A to Z. They’re not necessarily technical or functional experts. But they have a tendency to question everything and explore it their own way. As a result, they grasp concepts quickly, and find out ways to use them for business benefit.
When you have hackers on your team, you always have a great chance to outmaneuver your competitors, and reverse-engineer successful products to build something more useful. When you get into trouble, they are your risk management experts who can turn the seemingly inescapable horrors to greater opportunities for growth and success.
Serial entrepreneur Elon Musk is the definition of “the hacker”. In December 2016, The forward-thinking co-founder and CEO of both Tesla and SpaceX became frustrated while stuck in heavy Los Angeles traffic. He tweeted “Traffic is driving me nuts. Am going to build a tunnel boring machine and just start digging…” Why sit in traffic above ground when you could speed ahead below it? Most people complain about traffic, but Musk took action. Two years later, he made a brief public appearance to unveil the completed tunnel.
Good Habit 4: Fix it for yourself: Whenever you face a problem in your business, take some time and try to fix it first before you call for help.
5- The Expert
They are the heart and soul of the company — they know the ins and outs of your core product or service. They are functional experts who understand the importance of what you have built, how it helps your customers, and what improvements you can bring to make it more useful.
If you’re not an expert yourself, there’s no shame in hiring a know-it-all experts to help you understand every aspect of your business, stand out from your competitors, and create a product that exceeds the expectations of your customers. “If you don’t understand the details of your business you are going to fail.” Said Jeff Bezos, the CEO & Founder of the well-known e-commerce company, Amazon.
These experts, along with the other 4 types discussed above, will be the backbone of your business model, and will provide you with a strong foundation on which you can build a vibrant organization.
Good Habit 5: Track one major business metric daily: In order to truly understand the core of your business, you need to focus on at least one business metric per day, and try to learn something new about it.
You’ve put in your all to kickstart your startup and now you’re after investors who can share in the vision you have for your business. A great pitch goes a long way in securing investments and the way you present can make or break your chances. If you’ve been to one of Flat6Labs Bahrain’s Demo Days, then you’ve probably seen that we do know a thing or two about giving an exemplary pitch. Here are some of our tips to pitching your way to securing investments for your startup:
Have a solid deck: A good pitch deck is essential to any successful pitch. It is crucial to have a set of slides that outline your business model, revenue model, competition, business strengthsand market potential. While slide designs aren’t going to be a deciding factor for potential investors, you still need to put in some effort to have a clean-cut design with any useful visuals that fit in with your brand.
Get to the point: It’s good to have abundant information and research to use but prioritize the main aspects you need to communicate and cut back on anything repetitive and non-essential. Be clear, eloquent, concise, and get to the point!
3. Know your stuff: It goes without saying but we’ll say it anyway; when you talk, you should actually know what you’re talking about. You obviously need to have an arsenal of numbers ready to give potential investors but be careful about overexaggerating your figures. More often than not, VCs and investors can see through the smoke and even call you out for it. Another important thing to note is when making claims about how much your business is on its way to being worth; share the vision for it and your key steps to reaching it. It’s easy to claim that you’ll be worth $5,000,000 in 5 years time, and maybe you just might be, but with a bold claim like that you’ll definitely need to put your money where your mouth is.
4. Be confident but not un-open to criticism: Everyone tells you about the importance of confidence when speaking. And yes, it definitely plays a significant role in a successful pitch, because after all if you’re not confident about your product/service then how can you expect investors to confidently put their money into it! But there’s a fine line between confidence and not being able to take constructive criticism. Potential investors will ask tough questions, grill you, scrutinize your business model, etc. and it’s all part of the process. You need to be able to handle the stress and answer their questions well when they ask the hard stuff.
5. Practice, Practice, and Practice: There’s one sure way to get better at doing something; and that’s of course to practice, practice again, and then practice some more. Practice your pitch in front of others and get yourself used to speaking in front of a crowd. It’s normal to get a bit jittery or anxious, as long as you find a way to maintain your composure and perform your pitch. As cliché as it sounds, practice certainly does make perfect!
With your innovative services or products trying to enter the space of one thriving startup scene, it is crucial to know where your startups’ best interests lie; and what is the best course of action that will revolutionise how people live daily through your tech-based solutions. Identifying what you need early on, and settling on partnering with those who can help you propel your startup comes a long way; especially, if you chose Flat6Labs, and the reasons are many.
The resources available with partnerships help you ensure that your startup has garnered the necessary tools to scale. As you partner with Flat6Labs, you become one with an entity that has the experience of eight years accelerating +200 startups across the MENA region. This entails the expertise of Flat6Labs team, and the several bodies that support its existence like the Global Accelerator Network (GAN). With GAN’s connections to different experienced accelerators across the globe, it helps spread the know-how of highly technical and sometimes problematic issues.
Mitigating the Hurdles of Operating in the MENA Region
The expertise is just the tip of the iceberg, for in order to mitigate the common struggles that comes with regional or even global expansion; finding funds or mentors; finding a market need; outdoing competitors; or finding a team & getting exposed, it requires an expansive network spread across the entirety of the region. And, with GAN’s network of accelerators, it becomes across the globe as well.
One of the hurdles was identified in a research conducted by GetAutopsy on 60 MENA startups, which concluded that the main reason for 27.3% of startups failure was due to the inexistence of a market. A partner like Flat6Labs, can ensure that you take the necessary steps; be it pivoting or moving to a different market, all to avoid the startup’s early demise. Also, this kind of partnership allows you to ease your entry in a market that is more often than not resistant to innovative change that overtakes decades old manual processes.
Connecting to the Region and the Globe
Partnerships can enable startups expand beyond the borders of their origin; hence, highlighting and exposing their services and products to new markets. In fact, Flat6labs is one of the few accelerators in the MENA with regional and global reach. This network we pride ourselves in having is capable of, connecting our startups with government officials, investors, consultants, mentors, and even founders of startups like themselves who can on both regional and global levels — with the help of GAN network — offer unlimited support. This network also provides them with the tools to have soft landings in markets other than their own. You can take Rumman, a graduate of Flat6Labs Beirut program, as an example, which had a softlanding in Tunis because of Flat6Labs regional expansion and network!
Utilising Your Partner’s Network
Becoming one with such an entity, also means that the partnerships they have with investors, initiatives, and institutions can help startups explore new grounds and fund their operations.
Since finding talents is essential for growing startups, the Tunisian American Enterprise Fund Initiative (TAEF) partnership with Flat6Labs Tunis helps startups find the team that will help with its product/service development through its network. In one of our interviews with TAEF, the Chairman, said after Flat6Labs Tunis’ first Demo Day:
“TAEF has committed to serving all parts of the Tunisian small and medium business sector and this partnership is one of our important pathways for investment.” — Mr. Bowman Cutter, Chairman of TAEF.
While talents are important, the formula of success is derived from the many factors that come into play that’s why the partnerships your startup has with different entities contribute to your success. For example, through a network of local, regional, and international mentors and counselors, our partner, LE15 initiative of Meninx Holding, is capable of providing informative sessions that will help your startup kickoff. As well as, through their network, they can help you find potential clients/suppliers.
“Flat6Labs accelerator is opening up new horizons for these startups. We are very proud to support these high-potential entrepreneurs, and strongly believe that their energy, dedication, and innovation will help play a part in building the future of Tunisia.” – Mr. Mehdi Tamarziste, CEO of Meninx Holding.
Through different initiatives, such as OST, Bloommasters, Biatlabs and Endeaver, BIAT is supporting not only Flat6Labs, but the whole ecosystem by implementing the entrepreneurial mindset, and supporting entrepreneurs throughout the different stages of a startup.
Far into the Gulf, Tamkeen’s initiative to increase employment rates through encouraging startups is helping Bahraini startups develop plans, strategies, and build products/services that befit Bahrain’s market. This is done through the partnership they have with Flat6Labs Bahrain, and tailoring an acceleration program that is suitable for the Bahraini startup ecosystem.
Paving the way for many growth opportunities; increasing the chances of startups scalability; and pushing the startups into untapped markets has been a core drive of this partnership. This includes when Tamkeen helped send out three of Flat6Labs Bahrain startups: Innagrab, WNNA, and the Experience Accelerator to Silicon Valley to exhibit their products & services; network with a magnitude of professionals; and talk to bigwig, risk-taking investors.
Tamkeen’s belief in Flat6labs and efforts with it, is thoroughly illustrated through Tamkeen’s bigwig:
“We are delighted to have a world-class organization such as Flat6Labs, and look forward to enriching the experiences of Bahraini business by bringing global models and developing their business according to advanced and successful models of business accelerators.” — Dr. Ebrahim Mohammed Janahi, CEO of Tamkeen.
This partnership of sorts is helping curate a top-notch acceleration program that is supported by Tamkeen’s resources; knowledge of the local market; and funding, which will all contribute in creating more opportunities for our startups.
Developing Stronger Mindsets to Face Struggles Head On
It doesn’t exactly end with only two arms of a partnership aiding you through the onset of your life as a startup founder. Another arm would be the resourcefulness of our team when it comes to knowledge in helping in the creation of, solid business and financial models; the best ways to pivot; connecting you to investors; and sending you out on regional exhibitions to gain exposure. Also, mentoring you and your team through coaches & experienced mentors; creating workshops tailored to your field; and even finding you the best talents to help your startup progress with fresh minds!
Speaking of talents, GetAutopsy research also highlighted that one of the top three reasons for the startups failure was having a poor team incapable of developing the product/service. However, with Flat6Labs connections to a diverse network of professionals, this struggle becomes much easier to face head on.
With our network, regional exposure, and with GAN network of accelerators, Flat6Labs has demonstrated the ability to put its startup in front of investors at +30 demo days across the region. Over the last year alone, Flat6Labs’ startups received $1.3m of follow-on funding from different VCs, governments, and corporations.
The benefits you receive with partnering with a regional entity like Flat6Labs, puts you on a path filled with diverse growth opportunities that will enrich your startup with the necessary tools to flourish in a very competitive market.
