StartupGuy

I am StartupGuy
I start a fire with ice

Born: 29th July 19XX

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November 13, 2018 StartupGuy0

I was recently invited to Sharm El Sheik in Egypt to speak at the World Youth Forum, an event attended by over 5000 leaders from around the world organised under the auspices of the leadership of HE President Abdel Fattah Al Sisi. I spoke under the creativity pillar on the topic of the importance of startups in global economic development.

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I put this short note together to share a my thoughts on Egypt startup ecosystem.

Disclaimer: this post is by no mean exhaustive, there is a lot more to say ; just some food for thought.

Egypt currently ranks 120 in the ease of doing business index. Often times, people confuse ease-of-doing-business and healthy entrepreneurial ecosystem, and the criteria of the latter are very different from the former.

While Egypt has consistently ranked in the top 120 of ease-of-doing-business index, and has a nascent and growing entrepreneurial ecosystem, it is still lacking quantity in some of the ingredients for a healthy entrepreneurial ecosystem. But I must say that work is being done on the ground, evidently so.

Although it was my very first time visiting the Northern African country, I loved the experience apart from the scenic beauty but it’s rich history and the energy among young people.

While I was speaking at one of the sessions moderated by Mr Alaa Mostafa, sharing the stage with Dr Susan Amat and Mr Ahmed Alfi, I made the recommendations that an Africa-wide initiative for startups be established so as to promote intercontinental trade and cooperation as well as value exchange. I am happy that my recommendations where adopted by the organising committee and where subsequently presented to the President.

Five days after the conclusion of the World Youth Forum, a decision had been made to host the first Africa wide startup event in December (we are currently looking for startups who are interested to participate, you can shoot an email to me via startupguy@startupmzansi.org.za for more details)

A few years ago – 3 to be exact, I wanted to visit to Egypt but unfortunately the ecosystem was all but non-existent at the time. The government  was desperately trying to grow a very nascent environment but every vertical remained extremely siloed.

Fast forward three years and any newcomer to the city of Cairo would be shocked to hear that Egypt ever lacked a startup scene and an entrepreneurial flair. The community is enormous now and the country’s entrepreneurial buzz is palpable – especially in Cairo. This is truly an exciting time for Egypt–and these are the four main components that will keep the system thriving.

1. Talent

According to the Global Entrepreneurship Monitor, as of 2017 73% of young Egyptians have a heart for entrepreneurship.

One of the biggest gripes of the ecosystem is retention of talent. Most founders who started their company in Egypt would eventually leave for other countries, due the fact that the infrastructure and funding environment could not handle their growth. So when I see foreign startup founders actually coming in to Egypt, that gives me hope.

2. Money

The funding environment used to be dominated by a few firms. Now, this once tightly-held oligopoly is being superseded by a fresh new batch of “rising star” VC firms. Also throwing their hat in the ring are the investing arms of large organisations who have made waves recently by actively investing in local startups.

3. Infrastructure

There are currently over 50 co-working spaces, accelerators, incubators and innovation labs in Egypt. Back in the day, there was only one.

Today there are dozens available, ranging from the smaller local spaces to global operators. Joining the party are a number of accelerator and corporate innovation programs. Finally, there also exists a wealth of government-assisted programs including World Youth Forum Startup Vein.

4. Support

The support for startups in Egypt is increasing as more and more partners come aboard. With the World Youth Forum taking a premier position in the world as the must attend event attracting thousands of participants from around the world, I believe that Egypt is geared to be a hub for Arab-Africa startups.

Egypt is opening it’s country and has shown us that they are serious about youth and startup empowerment.

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I will keep writing about the experience and relationship I have with the Arab State. Stay tuned.


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July 27, 2017 StartupGuy0

Each year, the South African and regional entrepreneurial ecosystem is significantly more diverse, closely connected and globally competitive. We have dedicated the past five years mostly to designing attractive national programmes for supporting entrepreneurship, connecting key stakeholders at the local, regional and national level, and obtaining public and private capital assigned exclusively to startup companies.

Now it is time for the last big and important step, namely for systematically attracting internationally established large and medium-sized companies into the picture of the entrepreneurial startup ecosystem and into all possible forms of collaborating and connecting startups with innovative large and medium-sized companies, not only in the form of subcontracting but also in more advanced forms, such as licensing, open innovation, incubation and acceleration programmes, and mutual exchange of knowledge.

This is also the last important cornerstone of our business accelerator of the Startup Mzansi Foundation. The comprehensive supporting services of business accelerators currently include access to financial resources, public (up to R250 000 of capital) as well as private ones (network of business angels and venture capital funds), content support in the form of educational programmes, mentorship, individual guidance and training, and joint promotion of programmes. The latter includes publicly selecting programme participants, monitoring and promoting them, thus ensuring an efficient control of how public funds are used.

Last but not least, it is also important to ensure a suitable infrastructure, as it is very important for community building and active collaboration between companies, and has to be filled with content and programmes.

Besides further implementation of national programmes and even more international integration, there is another important strategic goal that we have set for ourselves, namely active integration of established innovative companies into our programmes. Everyone will benefit from this, small and large companies, and at the end of the day, the country and the region as well.

Sandile Shabangu
Founder & CEO

Startup Mzansi Foundation NPC


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February 26, 2017 StartupGuy0

What is startup entrepreneurship?

In a knowledge-based society, innovation is the driving force of the economy on all levels and in all types of organisations. Due to high risks present when introducing new products and services, innovations are usually commercialized via isolated formal formations such as startup companies.

Eric Ries, the creator of the Lean Startup movement, defines a startup as company is a newly formed company, the purpose of which is to develop new, usually innovative products or services in uncertain circumstances. If it satisfies a new need, present in a broader area or even globally, it also has great growth potential. Startup entrepreneurship is crucial because of innovations, new jobs and bringing competitive dynamics into the business environment. A feature of these companies is that they first test different possible business models in order to find the right one. But for this, they need a suitably developed support startup ecosystem.

The Global Entrepreneurship Monitor (GEM) research data show that worldwide, an entrepreneur with high potential creates on average as much as 3 times more jobs than an entrepreneur with average potential and as much as 15 times more jobs than an entrepreneur with low potential. Thus there is only 4 % of entrepreneurs who can be placed in the group of dynamic companies that have the potential to grow on global markets (on average they reach at least 20 % annual income growth) and they truly contribute to the economic development of the society, as they create as much as 38 % of all jobs. In the society, there is only 6 % of entrepreneurs with average potential, amongst which we also count those who achieve between 5 % and 20 % average annual income growth, and they create 28 % of all jobs. But the great majority of entrepreneurs have low potential (90 % of all) – on average they achieve only up to 5 % average annual income growth and together create 34 % of jobs.

Therefore growth is mostly generated by highly ambitious entrepreneurs who find and realize promising business opportunities. Their companies grow quickly and so increase the employment rate. A research by the Global Entrepreneurship Monitor South Africa (2012) states that one third of dynamics of countries’ economic growth can be attributed to the dynamics of startup entrepreneurship. They also contribute to the promotion of the research and innovation system and introduce values of proactivity into the society.

Entrepreneurial talents with high potential are very scarce and represent the most precious human resource of every nation, which is why they should be fully supported. The economic policy in general and the policy for promoting entrepreneurship have to understand that not all business activities are the same, much less that the motives for being an entrepreneur are the same for everyone. Facilitating settings for ambitious innovative entrepreneurship is fundamentally different to facilitating settings for self-employed necessity entrepreneurship.

Startup companies are thus those that have ambition and potential to become gazelles that can, with quick growth, create a large number of new jobs. This is often, but not always, the case for companies from high-tech industries.

The majority of developed countries in a knowledge-based society encourage startup entrepreneurship from the aspect of investment into the future as well as from the aspect of actively designing long-term economic policy. Why?

Five key reasons for encouraging startup entrepreneurship:

  • Innovations – They are the main driving force behind economic development and the increase of productiveness in a knowledge-based society. Startup companies are the most suitable form of implementing inventions and consequently the best mechanism for commercializing technological and other novelties. Startup companies contribute to a quick development of new technologies and the location where they operate. Large companies often buy startup companies because of technology (fundamental ingredient) that they then integrate into their business and thus keep their competitive advantage. At the same time, they provide knowledge as well as spin-off and spin-out companies to the startup environment, which wouldn’t be possible without a well- functioning startup ecosystem.
  • New jobs and economic growth – In the long term, startup companies create a large portion of new jobs and contribute to the country’s economic growth. Considering that startup companies are based on innovations, the potential of startup companies represents the healthy core of the economy. If the country wishes to encourage new employments in the long term, it is necessary for it to invest into the segment of companies that create the most jobs in the long run (in 10 years and more). Startup companies are the ideal form and opportunity for employing and activating the Y generation.
  • Bringing new competitive dynamics into the economic system – Startup companies are the most dynamic economic organisations on the market, since they provide additional dynamics and competitiveness to the economic system. This means that the economy stays healthy, vital and diligent, while individual companies find it harder to fall asleep on their laurels.
  • Promoting the research-innovation system – High-tech as well as knowledge-based service startup companies are very closely connected to knowledge institutions. An appropriate entrepreneurship ecosystem thus promotes the research & development as well as research & innovation approach of knowledge institutions, companies and connecting institutions as well as contributes to the applicative orientation of research work at universities and research institutions. Meanwhile it also works as a role model and encourages students and researchers to implement their ideas via a startup company.
  • Bringing the values of proactivity into the society – Startup entrepreneurship changes the values of the society and brings a new mind-set, in line with the society based on knowledge and creativeness. The population is starting to increasingly realize that they have a responsibility for their work and career development.