By: Hyacinth Mascarenhas
As a seasoned U.S. internet executive and venture investor, start-ups are no stranger to Christopher Schroeder.
After being invited to speak and mentor at the Celebration of Entrepreneurship in Dubai in 2010, he began his journey into Startup Rising: The Entrepreneurial Revolution remaking in the Middle East. Through 13 subsequent trips, he interviewed over 150 entrepreneurs, investors and global tech leaders giving the world a timely look at this entrepreneurial trend in the Middle East, one that “promises to reinvent it as a center of innovation and economic opportunity.”
He has written about startups and technology in emerging growth markets for several publications including the Washington Post, Wall Street Journal and the Harvard Business Review.
In addition to being named one of LinkedIn’s top 50 influences, he also co-founded HealthCentral.com, one of the largest social and content health and wellness platforms in the country, was the CEO of Washington Post Newsweek interactive and LegiSlate.com and served in President George H.W. Bush’s White House and Department of State. We got a chance to speak with him.
Elan: Tell us a little bit about your book “Start-up Rising: The Entrepreneurial Revolution Remaking the Middle East.” What are some of your findings about start-ups in the Middle East?
Christopher Schroeder: It is the first book that tells the story of the rise of tech startups in the Arab world — who they are, the challenges and opportunities they face, why now. It is so interesting to me that it has become a common narrative that the new generation has adopted technology to communicate and collaborate to organize their political voice. Many people don’t appreciate that these capabilities are allowing hundreds of thousands of people of all ages to take control of their economic future in the businesses they are building. And what is happening in the Middle East is really a lens to a global story. Within a decade, there will be 5 billion smart phones on the planet — super computing on the person of two-thirds of humanity. How we communicate, engage, collaborate, innovate, create our own futures is changing rapidly everywhere.
That this is happening so rapidly in the midst of the uprisings and political uncertainty should be no surprise, but it is also quite remarkable.
Elan: What sparked your interest in entrepreneurship in the Middle East?
CS: I’ve always been interested in the central issues of our times, and the relationship between the West has been intertwined throughout my lifetime. After September 11, a group of CEOs from the region and the US had me join fundamentally to get to know each other. By around 2008 or so 2009, some of the executives from the Middle East talked about startups there. Candidly, while I had travelled the world, including to the Middle East, and had outsourced technology almost anywhere, I really was suspect about what might be happening. In 2010, two of them created a large gathering, Celebration of Entrepreneurship where they invited me to speak – about 2,400 young entrepreneurs and investors from North Africa to Yemen with nearly a 2,000 waiting list. I look at my world view now as fundamentally before that event and after it. As I was once in the news business, journalists, friends asked me to write pieces when I returned to the region and these became a basis for the book. I wanted people to see a very vibrant, different and hopeful story playing out across the region.
Elan: You mentioned in an article for the Harvard Business Review that “the Middle East – despite its uncertainty – is rife with potential.” Tell me a little more about that.
CS: The “uncertainty” of course speaks for itself. We in the west tend to lump the Middle East into one bucket — forgetting that what is happening in Damascus is not what is happening in Amman or Dubai. The scenarios that range from bad to terrible are clearly present — as they are, I should add, in many emerging markets. But the Arab world alone is 350 million, with an enormous consumer base, and a perfect gate way east to west, north to south. Broad band adoption is increasing everywhere, and mobile penetration exceeds 100% in many countries. Smart phone penetration in Egypt will break 50% within three years, already has in much of the Gulf. ecommerce opportunities alone are enormous, confirmed by the hundreds of startups in it and the commitment of major related players like the region’s top logistics company, Aramex — who is investing millions to help. And, by the way, there is a reason Facebook, Twitter, LinkedIn and Pay Pal have all opened operations in the last year — players like Google, Intel, Cisco, Microsoft and others are doubling down their efforts. It is hardly an easy bet, but it makes total sense.
Elan: In your opinion, what are some of the strengths and limitations of this entrepreneurial system in the region?
CS: The people, their ingenuity, tenacity, courage to find ways to work around are stunning. The market and tech growth dynamics I described above are ripe with opportunity. So many challenges — in health, wellness, construction, desalinization, fresh water, recycling, and traffic — in fact are now often software problems that can be fixed by technology. And “Problem Solvers” are an enormous piece of the start-up puzzle I see. But these entrepreneurs face real headwinds as well. The challenges in education have spawned some great startups, but the gap between rich and poor are remarkable. Political and cultural leaders making choices to protect top-down authoritarian controls are at complete logger-heads with the with the bottom-up innovation of the entrepreneurs. Rule of law, country-by-country regulation, cultural resistance to risk and failure — all important to a thriving 21st century ecosystem are all being wrestled now.
Elan: Tell us a little bit about some of the start-ups that you can across in your research. What set them apart from other Western start-ups? Or were they similar to their Western counterparts?
CS: I found the startups fundamentally in three categories. The Improvisers take what has worked in the West and elsewhere and make it relative and relevant to the region. Maktoob, the “Yahoo!” of the Middle East is a great example, as are ecommerce juggernauts like souq.com. The Problem Solvers are the folks I described above — using software to go after challenges in education, health, traffic, crime, recycling, to build stronger societies. The Global Players know that the world is a click away, and many app companies and tech-based products are reaching global markets day one — even smaller merchants are shipping local goods around the globe because now they can.
A great venture capitalist once told me entrepreneurs are the same everywhere — put them in a room, and they act, solve problems, and innovate very similarly. I agree with this. No question circumstances and needs vary on the ground — but a great entrepreneur in Amman would be a great entrepreneur anywhere. There is more that brings people together globally than separates them in my view.
Elan: Do you think this entrepreneurial revolution and these unique experiences in the Middle East could lead to globally adopted software and technology?
CS: This is a huge question. Think about it, while once surprising places like Korea, Japan and even Finland became global players in consumer electronics and mobile hardware, there is yet to be a great, global software company. Now that software is so ubiquitous and really works around the globe, I think this will change. Why shouldn’t the Middle East lead in mobile software, it is a region that never really knew land lines? What about solar energy and water issues? How about even social networks since so many young people used them in ways the rest of the world has not? I think it is coming.
Elan: How do women factor into this rising trend?
CS: A recent study came out saying 35% of startups are run by women. One can’t say that about Silicon Valley (yet). Women are essential, and make outstanding entrepreneurs of course everywhere.
Elan: Many have said that your book shatters very pessimistic stereotypes of the region. Did you intend to do that?
This question made me freeze up a little. If pessimistic stereo types are shattered it is because the pessimists in the world open their minds to a different narrative and even go see for themselves (pessimists abroad and nay-sayers in the region). It is not the only narrative either, and there are many hard days ahead. But this hopeful scenario is playing out right now. I’ve not heard any other that gets close to addressing the youth bubble, unemployment, economic prosperity, and ability for being to have greater control of their lives. Vaclav Havel makes a distinction between “optimistic” — all good things will happen — and “hopeful,” they may not happen but their potential is real. I am very hopeful.
Elan: What advice would you give to an aspiring entrepreneur in the region?
CS: The same I say to any entrepreneur anywhere — if you want it bad enough, if you have no choice, go for it. The timing is never perfect, but the opportunity has never been greater than today. The people needing the advice are not the entrepreneurs, by the way, but the wealthy businesses and their executives, and policy figures, who at best talk a great game about supporting entrepreneurs but are slow to embrace it where it matters. One investor there told me, “There is good news and bad news — the good news is we have all the money and resources they need. The bad news it is in our pockets…” The role businesses can offer in capital, in opening their operations to work with entrepreneurs (as Aramex has, and some of the leading local mobile companies), and in mentorship — could change this entire game if not over night, almost.
Elan: Is there anything else you would like our readers to know about your book or your observations?
CS: Anyone who cares about the Middle East needs to understand that the rules of the last decades while hardly irrelevant are giving way to new opportunities unimagineable even five years ago. People often think of Tech as some little bucket over there, kind of a side show — but the real story of our time is that tech is like water. It is there for everyone to use, to be assumed. Even the most basic companies and organizations simply imbed it without thought. The newer generations understand this implicitly — and some very simple support, more often than not simply getting out of their way, will change every part of the world in the coming years.
Follow Chris on Twitter: @cmschroed
Order his book HERE.