To date, small and medium-sized enterprises (SMEs) and family businesses continue to represent around 90% of companies in Lebanon and have historically constituted the bulk of the Lebanese economy. Around 7 years ago, a new flavor was added to the establishment of new businesses: the use of technology in the development of solutions, by adding innovation to improve the way we run things.
Up until 2013, the concept of a startup was not very common in the local entrepreneurship scene. It was boosted in 2014 when the Lebanese Central Bank released Circular 331, a 400 million USD injection to encourage banks to invest in startups. Despite its challenges and drawbacks, this was the golden chance for Lebanese talent to show what they have always been known for – a vibrant, entrepreneurial spirit, and “out of the box” thinking.
Within just a few years, Lebanon witnessed a surge in the tech start-up scene: in 2019 alone, Lebanon was home to more than 2,000 startups operating in Lebanon and supported by accelerators, incubators, venture capital firms, and many other ecosystem players. The country witnessed many success stories (that came in parallel with other failures as well), such as Diwanee, a leading digital media company, Anghami, the first legal music streaming platform and digital distribution company in the Arab world, Toters, an on-demand delivery tech platform, Synkers, a mobile application which instantly connects learners to highly qualified and certified tutors, Sohati, an online para-pharmacy platform, among many others. Innovation was really at the core of these services and products. Startups used technology to serve the purposes of education, health, entertainment, commerce, etc.
In parallel with the ecosystem’s growing number of businesses, many support organizations came to life; digital parks, such as Beirut Digital District (BDD) which served as a hub for startups and business owners, incubators, such as Berytech, accelerators, such as Speed Accelerator and Flat6Labs, venture capital firms, such as B&Y and Middle East Venture Partners (MEVP), and other support organizations such as Arabnet, Endeavour, and the MIT Enterprise Forum Pan Arab Region. Alongside these organizations, the entrepreneurship community in Lebanon was very active with planning networking events, start-up competitions, and workshops that offered support to business owners, young graduates, and potential recruits.
One of the key success factors for the rise and growth of this ecosystem is the partnerships between the ecosystem players and their resilience and commitment to keep on advancing. In fact, the startup scene was faced with many challenges, from lack of tech infrastructure to lack of access to funding, below are some key challenges that were and continue to be faced by entrepreneurs:
• Challenges with the existing tech infrastructure
• Lack of public-private partnerships to help ignite the ecosystem
• Lack of specialized talent (especially in the tech and creative sectors)
• Lack of funding (especially in seed-stage funding and advanced funding)
For the new joiners, if you have an idea and want to develop it further, below are some suggestions on where you can start:
• If you are just starting, you can join an online hackathon (many hackathons are happening today – make sure to regularly visit key websites' and hubs’ social media account to stay up to date
• This is a great chance to meet potential co-founders and team members, as well as evaluate the feasibility of your idea (without being too attached to it)
• If you are in the early stages of your startup, join an online accelerator program
• If you want more funds, seek out funding organizations (such as venture capital firms)
• If you are an entrepreneur, always seek continuous improvement: seek mentorships, innovate, attend workshops and webinars
Whether you are just starting with your business idea or are an established entrepreneur, seeking advice will always be a plus. There are numerous channels and communities for networking and seeking mentorship from professionals in the ecosystem (they have been in your shoes). Throughout the journey, try to find a team with different backgrounds, whereby each member would bring in a different flavor to the idea while continuing to work collaboratively with your team. Finally, try to remain up to date on what is happening today by tackling an existing problem or need. For example, consider the focus on software more than hardware, targeting a niche market, or the challenges of remote work.
Always remember to be flexible and adjust your idea as many times as needed!
By Nour Fakhoury, Consultant at Euromena Consulting