Reprinted from The Middle East magazine. See the original article here (p. 41).
By Justin Belmont (Director of Communications, Endeavor)
By 2020, an estimated 100 million young people, many of them college-educated, will enter the job market. What kind of opportunities can they expect? How can the region guarantee there will be enough high-quality jobs to go around? What is the best long-term solution to ensure sustainable economic development? These are some of the same questions our global non-profit organisation, Endeavor, encountered 14 years ago in Latin America. And we found the answer has a lot to do with three words: High-Impact Entrepreneurship.
High-Impact Entrepreneurs are visionaries whose businesses have the potential to scale significantly, both in terms of job creation and revenue growth. Historically, in most economies, it is only a small number of high-impact, high-growth entrepreneurs that create the vast maprity of new jobs. This reality has been supported by the World Economic Forum in their recent report on worldwide entrepreneurship, authored by Stanford University Professor George Foster. The report found that the top 1% of companies from among 380,000 companies reviewed across 10 countries contribute 44% of total revenue and 40% of total jobs, while the top 5% contribute 72% of total revenue and 67% of total jobs.
When it comes to developing an entrepreneurial eco-system in the Middle East, much attention has been placed on the role of investment. Indeed, the availability of ‘smart capital’ for entrepreneurs is an important facet. Further, it is encouraging that many new regional funds are being established to provide much-needed capital to small and medium-sized enterprises (SMEs).
At the same time, Endeavor has learned over 14 years that capital alone is not the answer, When we started Endeavor in Latin America in the late 1990s, we noticed that entrepreneurs lacked three key components: access to mentors; access to networks; and access to role models.
Access to schools of entrepreneurship such as the celebrated Carnagie Mellon contribute to the development of rounded individuals.
In order to find these High-Impact Entrepreneurs, we set up a competitive selection programme where entrepreneur candidates pass through a series of local, regional, and international judging panels.
Throughout the selection process, we are looking at a number of things: the commitment of the entrepreneur to accept feedback and adapt change in their business; the willingness of the entrepreneur to consider giving back to their community; the potential for the company to scale; and receptiveness to feedback. At each stage of the process, companies receive concrete feedback that helps them build their businesses.
Support organisations like Endeavor, WEF and Wamda (a platform to facilitate entrepreneurship in the region) attest to a simple fact: entrepreneurs aren’t created in a bubble. They require support, mentorship, introductions, and skills training from the local business community. Across the Middle East, it is evident that the private sector is taking notice, and providing the hands-on support needed for high-impact entrepreneurs to truly scale.
In recent years, one of the most impressive aspects of entrepreneurship in the Middle East is the ‘multiplier effect’. Entrepreneur success stories are never one-off events, but establish a pattern of inspiration and momentum. Just look at Maktoob, the Arabic online portal famously acquired by Yahoo! in 2009. Across the region, countless entrepreneurs are saying, ‘T want to be the next Maktoob.” It only takes a few of these stories, these role models, to spur a new way of thinking. And once an entrepreneur has her or his mind on something, no challenge is too big.
One such entrepreneur is Khaled Ismail, whose Cairo-based 4-G wireless software company SySDSoft was acquired in March 2011 by Intel, in the midst of the Egyptian revolution. As the first Endeavor Entrepreneur selected in the Middle East, in 2007, Khaled built a business that designs cuttingedge products for the wireless broadband market – from WiMax and WiFi to Bluetooth-and created over 100 jobs.
Like the founders of Maktoob, Khaled hopes his own success story and well-publicised exit will inspire others. “Now, more and more young entrepreneurs have the guts to take risks and hope for a good upside,” he says. “After the revolution of 25 January, I’m optimistic. I hope that the change that has happened will entice a lot of young Egyptians to have a dream, take the risk, but have the patience to not simply chase quick profit.” Meanwhile, as an excellent example of a High-Impact Entrepreneur, Khaled isn’t simply a role model himself but an active participant in the cultivation of the next generation. He actively mentors up-andcoming entrepreneurs, particularly in the technology arena.
Another entrepreneur making a difference is Amjad Aryan. As a Palestinian attending college in the US, Amjad took a job at the popular pharmacy chain CVS, working his way up from a cashier to a store manager. Now living in Amman, he founded and currently runs Pharmacy 1, the largest pharmacy chain in Jordan with 53 domestic stores, two stores in Saudi Arabia, and more branches on the way including in Beirut. In the process, he has created 455 jobs including 280 pharmacy positions. Nine of out 10 of these pharmacists are recent graduates, and 70% are women, many of whom work until midnight in a country where most women do not work at night.
Like many entrepreneurs in the region, Amjad has adapted an already successful business model – that of CVS – to a local context. Rather than replicate it exactly, he has adopted some of its best practices while tailoring it to local conditions. Today, Pharmacy 1 stands out for its convenience, professionalism, expert staff (achieved through extensive employee training), and excellent customer service. But characteristic of HighImpact Entrepreneurs, Amjad isn’t content to simply build a successful enterprise. His mission: to create not only the CVS of Jordan, but the CVS of the Middle East.
High-impact women entrepreneurs When it comes to scaleable enterprises, gender is no barrier. Increasingly in the region, ambitious female entrepreneurs are creating high-impact enterprises and serving as powerful role models.
Nada Debs, one of the first entrepreneurs selected by Endeavor Lebanon in 2011, is one such example. Based in Beirut, Nada has built an elite furniture design brand that mixes the Zen -like simplicity of her childhood spent in Japan with the aesthetic traditions of the Middle East, her home. In addition to her flagship stores in Beirut, her products can now be purchased at top furniture stores worldwide, from New York to Dubai. Currently, she employs 150 artisans in Lebanon, proving the scaleable potential of companies hi the creative and design industries. Nada has been featured in over 120 magazines and newspapers worldwide, from the New York Times to Vogue.
More and more, women entrepreneurs are playing a vital role in the economic development of their region.
Factors that define entrepreneurial success Recently, Endeavor’s research team evaluated our portfolio of entrepreneurs to pinpoint what factors predicted success, analysing over 100 characteristics. On the level of strategy, we found that one of the best performance indicators is the quality of thinking big – specifically, the goal of expanding to at least five countries. Interestingly, many of the major internet power plays recently have come out of smaller countries like Jordan and Lebanon, as opposed to places like Saudi Arabia. The lesson for these larger countries is not to get complacent and rely overly on the domestic market, however large it is; always keep an eye outside your borders.
Meanwhile, when it comes to the macro factors that define entrepreneurial success, we have found that a partnership is necessary among all players in the ecosystem. In terms of education, it is excellent that more universities are teaching entrepreneurship courses as well as case studies of role models. At the same time, it is important that the focus be not only on training entrepreneurs, but management talent. Everyone likes to talk about Google and Facebook, which have an enormous pool of talent from which to hire. But in places where this management talent doesn’t yet exist, universities play a vital role.
In terms of the government, we also need to have transparency along With things like labour laws and bankruptcy.
The big picture When Endeavor entered Brazil in 2000, we saw a huge disparity of wealth and connections, and a plethora of concentrated networks closed off to new entrepreneurs – young people who lacked mentors, role models, trust, and capital. Fast forward to today, and more than the popular future host of the next World Cup and Olympics, Brazil is home to one of the most exciting and vibrant entrepreneurial cultures in the world.
For the last decade, we have seen similar stories play out repeatedly across Latin America. And the Middle East is poised for a similar trajectory. The time is now for the global phenomenon of high-impact entrepreneurship to transform the region.
It’s possible. It’s going to happen.
It’s already begun.
The following are case studies on 13 entrepreneurs to watch, put together by Endeavor and The Middle East. See the original layout here (p. 44).
Identifying people in the blink of an eye
Imad Malhas (Jordan)
As instances of fraud have become more widespread and governments, companies and banks are looking to upgrade and modernize their databases, iris-recognition is the fastest growing of the biometric technology solutions emerging in response to this growing demand. Irisguard, founded by Imad Malhas is now being employed by a number of different institutions worldwide. Cairo Amman Bank uses the technology in its branches across Jordan and Palestine, and it is the first and largest iris-recognition solution used in the UAE. Irisguard technology is also being used in law enforcement agencies in the US. The company continues to grow, with offices in Jordan, the US, the UK, Switzerland, and UAE.
Fadi Ghandour is possibly the most talked-about entrepreneur in the entire region. Down to earth and bubbling with energy and enthusiasm, he founded the DHL of the Middle East, Aramex. Ghandour has dabbled in a variety of projects: He was also the founding partner of Maktoob, an Arab web portal subsequently sold to Yahoo! for over $100 million. He is passionate about the region and entrepreneurship and has set up a number of initiatives to help develop the notion throughout the Arab world and assist talented young individuals realize their business dreams.
Solving challenging issues with wireless tech
Khaled Ismail (Egypt)
SySDSoft, set up by Khaled Ismail, is an innovative company that specializes in developing cutting-edge wireless communications technology, solving some of the most challenging technical issues facing wireless technologies such as WiMax, WiFi, and BlueTooth. In March 2011, SySDSoft was acquired by Intel in the midst of the Egyptian revolution. In July 2011, it was announced that Khaled would assume the role of Board Chairman, Endeavor Egypt.
Omar Koudsi and Laith Zraikat transformed what began as a small web-hosting company into a premier online “Places” community, which publishes user-generated reviews of local establishments such as restaurants, doctors and department stores. Jeeran currently has localized sites for eight locations: Amman, Jeeddah, Riyadh, Abu Dhabi, Dubai, Damman-Khobar, Kuwait and Doha. Right now, 100,000 places appear on the site, 70% of which did not previously have an online presence. The site currently features over 40,000 reviews.
Ihsan Jawad, founder and CEO of Zawya, began his career as an investment banker in London, where he worked with Merrill Lynch and Schroders’ Middle East corporate finance arm. After realizing the paucity of available business information in the Middle East region, Jawad founded Zawya in 2000 and embarked on a mission to establish it as the region’s premier source of such data. He moved the company’s headquarters from London to Dubai in 2003 and has seen an acceleration of the company’s growth since then. CEO of the company until 2010, Jawad is now trying his luck in the headhunting business.
Rabea has spent the last 12 years building profitable companies as an entrepreneur in the Middle East. He founded and continues to serve as the CEO of Bayt.com which was launched in June 2000. Today Bayt.com, the number 1 job site in the Middle East, serves over four million registered professionals and over 30,000 employers in the region. As CEO, Ataya recruited the executive team that has raised several rounds of venture capital and private funding and has led strategy, direction and implementation.
Revolutionizing academic publishing through the ‘open access’ model
Ahmed Hindawi (Egypt)
Ahmed Hindawi is a high-energy physicist turned entrepreneur. He co-founded Hindawi Publishing Corporation in his native Cairo (after completing his PhD), and has since developed a portfolio of 300+ peer-reviewed academic journals. In a global market dominated by large publishers, Hindawi’s competitive edge comes from its early adoption of the Open Access Distribution model. Its revenues come from author fees (as opposed to subscriptions) and Ahmed makes all content freely available on Hindawi’s website. As the market shifts towards Open Access, this fast-growing company will create hundreds of jobs.
T.A. Telecom, set up by Amr Shady, has been serving people’s ‘need to know’ via mobile technology since 2000, when Egypt had only single-digit mobile penetration. The company’s first service was demographically targeted, permission-based SMS advertising. T.A. Telecom specializes in creating value for the cost-savvy prepaid mobile customer, as well as capturing the value and generating revenues for the mobile operators. With over a decade of experience in the VAS industry, T.A. Telecom is positioned to become MENA’s premier mobile platform for time- and location-specific content.
Creating the CVS of the Middle East
Amjad Aryan (Jordan)
Pharmacy 1 (pharmacy-1.com)
Dr. Amjad Aryan has a clear goal: to turn his company Pharmacy 1 into the CVS of the Middle East. Amjad returned from the United States in 2003–after working his way up the ladder at CVS and acquiring, with his family, a small chain of pharmacies in Miami–with a mission. His aim was to make Pharmacy 1 the leading pharmacy in the Middle East, starting with operations in Jordan. Recognizing the need for quality pharmaceutical healthcare and customer service in an environment characterized by a nonchalant attitude towards service and an antiquated view of the retail pharmacy profession, Amjad used his savings to open the first Pharmacy 1 in 2001 in Amman. Currently, the company is the largest retail pharmacy chain in the country, with 53 pharmacies in Jordan, two in Saudi Arabia, and more branches on the way including Beirut. The company continues to stand out for its convenience, expert staff (achieved through extensive employee training), modern logistical network and excellent customer service.
Building an elite Lebanese design brand
Nada Debs (Lebanon)
East & East (nadadebs.com)
Employees: 37 (and 150 artisans)
One of the first Endeavor Lebanon entrepreneurs, Nada Debs has built an elite design brand manufactured by a network of 150 artisans in Lebanon. Her designs mix a Zen-like simplicity, drawn from her childhood spent in Japan, with the aesthetic traditions of the Middle East, her home. In addition to her flagship stores in Beirut, her products can be purchased at top furniture stores worldwide, from New York and London to Rome and Dubai. Her brand has been featured widely in international media outlets and her designs decorate the Jordanian Royal Palace.
With over 30 million people now using social media in the Middle East, the region is ripe for digital marketing. Founded in 2007 by Nemr Badine and Marc Dfouni, Eastline Marketing (ELM) was the first digital marketing agency in Lebanon and one of the first in the region to offer a complete range of online marketing services. JELM is now developing campaigns for Kimberly-Clark, Toyota, DHL and top local bank Audi. The company has forged inroads into Qatar and Saudi Arabia. With plans to keep shifting towards a higher margin, more scalable products using its proprietary technology platform, Sweepz, and to open new offices, ELM is well on its way to becoming the leading regional digital marketing agency.