Having successfully launched Namshi.com, an online retail company in Dubai, Muhammed Mekki wanted to help fellow Internet entrepreneurs in the region find their footing.
Mekki, who graduated from the Wharton school, spent hours going over lessons and training for his Namshi employees. Mekki and Louis Lebbos, who co-founded the fashion e-retailer, said such efforts helped them form the idea for AstroLabs, a new venture aiming to close several gaps they see in the regional entrepreneurial ecosystem.
Together, Mekki and Lebbos recently convened the first AstroLabs program, a three-day event in one of Google’s offices in Dubai Internet City. Instead of typical business sessions in the region that are conducted in cavernous convention halls, informal groups huddled around colorful couches and beanbags in the small office, while electrical wires snaked across the floor to power up several laptops.
"We launched "Scaling Online Startups" (SOS) as our first program to address the most important [issue]," Mekki said. "From our own experience, we noticed that founders of startups in the Arab world have very few resources to learn practical topics applicable to scaling their businesses, connect with like-minded individuals to discuss applying these topics, and find sources of funding to fuel their growth. AstroLabs, through the SOS program, aspires to close all of these gaps for the highest potential online businesses across MENA."
There are certain areas that regional entrepreneurs need the most help in terms of skills and guidance, Mekki said. "The same key themes consistently appear: how to allocate marketing spend to acquire customers more efficiently, ways to overcome challenges with logistics (including cash on delivery), and tips on international expansion. Digital marketing is always a hot topic, with modules on designing website for conversion and running best-in-class search engine marketing campaigns attracting a lot of attention from participants."
There are key lessons Mekki hopes to impart to other entrepreneurs and startups. "Some of the most important lessons from the "Scaling Online Startups" acceleration workshop actually come from the concrete case examples shared by the participants themselves," he said. "We encourage an open environment where entrepreneurs share what worked or did not work for them at their companies. One of the most important lessons from AstroLabs SOS is that your best resource as an entrepreneur is your fellow entrepreneur, a fact we rarely take to heart here in MENA."
Attendees listened to advice from industry leaders, such as Elias Ghanem, PayPal’s General Manager for the Middle East and North Africa. Unlike other forums, most of the attendees were from e-companies that already had launched and established themselves, and were in development. They raised a number of their own concerns, particularly with customers unaccustomed to paying for items with credit online. In this region, many customers insist on paying cash on delivery (COD) as they are unaccustomed to using credit cards online.
"E-commerce growth is definitely hampered by the regional preference for the COD payment method as successfully delivering products becomes much more difficult when cash needs to be received at the door," Mekki said. "Luckily, with companies like PayPal entering the market and opening up alternative easy and secure payment methods, we are hopeful that this cash trend will start to decrease as the market matures."
More mundane issues were also thrashed out, such as how regional laws prevented internships. One startup wanted to get young interns to work for credit rather than pay, but was not allowed because of visa and salary requirements for all employees in the UAE.
The spirit of cooperation that existed at the Astrolabs event impressed attendees. "People are generally very protective of their information, but so much information is being shared here," said Loulou Khazen Baz, founder of Nabbesh.com, which connects freelancers and contractors seeking work in the Middle East.
"We are all here interested in growing this ecosystem, and interested in making entrepreneurship mainstream," Baz added. "We’re the early adopters. If we can find solutions, it will open up the path for the rest."
The workshop’s focus on providing practical advice was well appreciated by May Habib, founder of Qordoba, an online Arabic translation service based in Dubai. She said she found herself making several ‘to-do’ lists after listening to industry experts and fellow entrepreneurs.
She echoed the mantra of cooperation for mutual benefit. "We have better insight into the challenges we all face," Habib said. "Unless we grow the pie, we’re all going to be fighting for crumbs."
At the event, a number of entrepreneurs suggested there was more funding in the market now than previously. "It seems like it is easier now," said Brian Sigafoos, chief technical officer of DUPLAYS, a startup that connects like-minded athletes and sports players.
"There is no doubt that available funding continues to increase in MENA," Mekki said. "This is the result of new local investment funds opening, greater attention being paid to the region by international sources of capital, and emerging success stories in the online space. We expect even more venture capital to flow into MENA in the coming years to fuel the continuing entrepreneurial growth."
Mekki said both private and public sector initiatives have been successful at spurring excitement about the concept of entrepreneurship over the last few years. "These conferences and workshops, however, have largely catered to business ideas at the incubation stage and not much emphasis was placed on assisting the existing businesses reach scale," he said. "With the support of our strategic partners from the private and public sectors, AstroLabs aims to close this gap."