Distinguishing yourself amongst the rest
If you have been following our studies in the last few months, you will see that we have often referred to the big four. Egypt, Kenya, South Africa and Nigeria. We have referenced them with regard to the attraction of Venture Capital Funding in the last few years. These countries have come up at the top and are now effectively technology hubs in Africa or at least hubs that are dominating their respective regions. In Kenya we noticed the attractiveness of the ecosystem there and the friendliness of the participants as well as the variety of platforms upon which growth was taking place. South Africa was astonishing in so far as her ability to link with institutions in ways similar to those of Silicon Valley as well as the regional angst that was expressed in the spaces there. In Nigeria on the other hand we noticed that the country had harnessed its population towards the adoption of mainly fintech taking advantage of its very highly educated and banked populace.
Entrepreneurship and Technology
This time we deal with Egypt and we confess that we owe a lot of what we will write about today on a paper written for the Ecosystem in Egypt that focused on Entrepreneurship and the Global Entrepreneurship Index (https://www.mdpi.com/2071-1050/13/13/7171/htm). So we will be trying to equate the success of lack thereof of the Technology Ecosystem to that of the Entrepreneurial Ecosystem and using the GEI (Global Entrepreneurship index) as a guide in that. First a little background around the development of Egypt’s technology ecosystem and its growth.
The rise and rise of Egypt’s Technology Ecosystem
According to a Disrupt Africa’s African Tech Startups Funding Report 2019, 311 startups on the continent raised a grand total of US$491,623,400 in 2019, up 46.7 per cent on 2018. Funding did not go to the first three (South Africa, Nigeria and Kenya) that made 2019 a little different.
Eighty-eight Egyptian tech startups secured investment over the course of the year, more than any other African country, and accounting for 28.3 per cent of the overall total. This represented growth of 159 per cent on the 34 startups that secured investment in 2018.
These startups secured almost US$90 million in funding, a higher figure than South Africa and one bettered by only Kenya and Nigeria. This accounted for 17.4 per cent of Africa’s overall total funds raised, and was up 45.5 per cent on 2018 (Notes taken from https://disrupt-africa.com/2020/02/04/how-egypt-established-itself-as-an-african-tech-hub-to-be-reckoned-with-in-2019/).
Here is what is on the ground in Egypt.
You have accelerators and incubators, local venture capital firms and angel groups, government support and not for profits, co-working spaces, regional and international venture capital firms, events, meetups and boot camps as well as startup media and insight groups. And here is he it works. You have the small business idea that is born in a co-working space that often hosts events, meetups and boot camps. Through these events especially competitions and hackathons, a few emerge as being talented having won the competitions, these then attract the interest of incubators who take them on with ideas on how to improve. Incubators normally work with businesses in their infancy. These then progress to accelerators that can further drive growth for these small businesses. Eventually they attract the interest of local or international VCs who then invest in them. By connecting with government or not for profits organizations, these come up with solutions that are relevant. Later on based on success these groups then gain the attention of media which serves to generate regional and global growth.
The Global Entrepreneurship Index, Entrepreneurship Ecosystem and Technology.
The paper recognized the importance of entrepreneurship in regional economic development. This was done by examining or analyzing the characteristics of the Egyptian Entrepreneurial ecosystem using the Global Entrepreneurship Index. Data was taken from 2006 to 2017.
The Egyptian Revolution and the Arab Spring-where optimism on the street did not translate to optimism in the market
Notable in the study was the year 2011 and the few years that followed this momentous year where Egypt had its revolutions, and the region faced the Arab Spring with effects. According to the report, “the lowest GEI score was in 2012 due to the social and economic issues that accompanied the Egyptian revolution of 2011. This revolution began in December 2011, when mass demonstrations broke out all over Egypt protesting against poverty, government corruption, unemployment, and low economic levels in the country. Subsequently, Egypt went through various drastic changes that affected all the economic sectors and processes. After this period, the Egyptian GEI scores expanded to increase social and economic opportunities….”
The pillars examined
The report further reveals that, “the Egyptian entrepreneurial “Aspiration” pillars play a promising role in the Egyptian entrepreneurship ecosystem, especially the “Process Innovation” (new technology and the average number of science institutions and the availability of scientists and engineers) and “Risk Capital” (informal investment and capital markets) pillars. Although the entrepreneurial “Abilities” pillars appear as shortcomings in the Egyptian GEI, especially the "Opportunity Startup" (opportunity motivation and governance with taxation) and "Competition" (competitors and competitiveness, market domination and regulation) pillars. Furthermore, Egyptian entrepreneurial “Attitudes” pillars are considered to be the main disadvantage of forming the Egyptian GEI score. It also proved that the “Risk Acceptance” (risk perception and country risk) and “Networking” (know entrepreneurs, urbanization and infrastructure) pillars appeared as the weakest aspect of the Egyptian entrepreneurship ecosystem. Consequently, developing national policies and strategies to enhance these two pillars will improve the Egyptian GEI score by 2%.”
Below is a useful list of the map of the Technology Ecosystem as it stands. We have made it brief giving just two examples of each except when it came to the success stories. Those are listed in full. We think that the stages below can be useful when mapping the progress of your start-ups.
Startup Stages
There is no one right way to build a technology company, but for the sake of simplicity we have outlined a basic, common, sequential framework.
1. Idea Stage
This is where new entrepreneurs get inspired, learn best practices, develop skills, validate ideas, and begin to build their team and product.
A. Inspire
- Egypt Startup Media: Centralized local information, listings, and news. (i.e. startup blogs / publications / lists / FB groups / newsletters).
- Inspirational Egypt Startup Events: Open, inclusive startup events that often focus on ideation. (i.e. Startup Weekend, idea fairs, and inspirational meetups)
B. Educate
- Best Practices: Beginner knowledge-sharing tech events. (i.e. beginner events that serve to educate more than inspire).
- Training & Feedback: Skill & Idea development events and startup bootcamps for entrepeneurs. (Includes comprehensive training programs, like Founder Institute, General Assembly, Lean Startup Machine, code camps, etc)
C. Validate
- Team Formation: Events for Finding Co-founders in Egypt. (i.e. tech networking events or other resources that facilitate early-stage recruitment and cofounder matching)
- Build First Product: Hackathons & product events in Egypt.
2. Launch Stage
In this stage, entrepreneurs establish and formalize the company, develop the product, get feedback from customers, and prepare for the next step.
A. Start
- Establish: Egypt law firms & banks for startups
- Egypt Workspaces: Co-working and flexible workspaces for startups in Egypt.
B. Develop
- Formalize: Egypt accounting, development and HR tools for early-stage startups.
- Egypt Incubators: Groups that prepare companies for seed investment and provide advanced mentorship. (i.e. advanced knowledge sharing, later stage events and resources)
C. Launch
- Egypt Seed Accelerators: Seed funding mentor programs (Techstars-style programs that provide funding)
- Pitch & Demo Events: Tech events that showcase Egypt startups for investment.
3. Growth Stage
Here, a startup proves their utility, receives recognition, and scales up. This usually requires funding, angels, VCs, and ways to connect them to startups.
A. Recognition
- Egypt Investor Networking: Events and groups that connect professional investors with founders.
- Major Media: Mainstream local business press that often showcase local startups.
B. Funding
- Egypt Angel Investors: Seed-stage investors and micro-VCs.
- Egypt Venture Capitalists: Series A and beyond
C. Growth
- Infrastructure: Office space, HR, local business insurance. (i.e. office space/ HR/ insurance providers for capital-rich companies to grow and scale)
- Expansion: Egypt Growth accelerators and consultants. (i.e. programs and business consultants for capital-rich companies to grow and scale)
4. Egypt Startup Success Stories
Successful homegrown companies that have raised significant institutional funding, employ a large workforce, or have achieved liquidity.
- Aqarmap (Cairo)
- Bashar Soft (Cairo)
- Bosta (Cairo)
- Dsquares (Cairo)
- Edfa3ly (Cairo)
- elmenus.com (Cairo)
- Elves (Cairo)
- Fawry (Cairo)
- Forasna (Cairo)
- GoodsMart (Cairo)
- Hawaya (Formerly Harmonica) (Cairo)
- Mumm (Cairo)
- Halan (Cairo)
- homzmart (Cairo)
- Instabug (Cairo)
- Lynks (Alexandria)
- Robusta (Cairo)
- Swvl (Cairo)
- Synapse Analytics (Cairo)
- Vezeeta (Cairo)
- WUZZUF (Cairo)
- Yaoota (Cairo)
Supporters
To facilitate the steps, every ecosystem needs strong supporters.
1. Egypt Startup Leaders
Successful local founders who lead the ecosystem & frequently mentor newbies.
2. Government Startup Resources
Public organizations that facilitate local economic development
3. Talent
Major local business or tech universities and employers that attract and retain local talent.
- Local Egpyt Tech Universities (universities with prominent technical or business programs)
- Egypt Tech Employers
