Young Founders: The Troubles of Startups in the Middle East

In countries like Egypt or Jordan, women founders in particular have to struggle with many difficulties. It is not just because of the bureaucracy that they need perseverance.

Hala, the founder of the start-up Hequqi, is sitting in a cafe. It is located in a Cairo courtyard. Around 80 seats, almost all of them occupied. Big fans try to make the 38 degrees bearable somehow. Here Hala works ten hours a day. But with headphones – because of the background noise.

Weeks until registration

The beginnings of her independence were bumpy, she says. “When I wanted to register my company, the officer looked at me and said he needed a document that confirms that my co-founder is not a lawyer. There is no such document at all.” But after she wandered around for days in search of the required papers and ended up with the clerk in the office, he only said: “Anyway, because of all the effort, I’ll just give you permission now.”

This experience already describes the core of their work. Hala helps other founders to fight their way through the Egyptian bureaucracy jungle. That it is one of the most stressful things of all to register a new company of your own is simply not normal, she says – and refers to herself and her experiences: “I am a lawyer, actually it should have been easy for me. Nevertheless, it has It took me three weeks to register my own company. ” The 24-year-old founded her company a year ago. With two good friends, she currently looks after nine customers. Hequqi, the name of the start-up, means something like “My right”.

Limited options

The company made it into the selection of Google’s “Accelerator” program. More than 500 founders from the Near and Middle East had applied. Only twelve were selected. The person responsible for the region at Google is Salim Abid. He is in Lebanon. “If you look at the Middle East and go to the local level: Who can solve the problems locally? We are convinced that local problems can also best be tackled by local founders. They have the best possible solutions “, he explains the selection of Halas start-up.

The program supports start-ups all over the world. More than a hundred experts help with the first steps – whether with financing or marketing. “I think startups are important everywhere,” says Abid. “But the possibilities in the Middle East are simply limited. And start-ups increase the opportunities for women, developers and founders.”

And start-ups from the Middle East have come a long way. Two examples: Souq.com, an e-commerce platform, was bought by Amazon in 2017 for 580 million US dollars and currently employs around 3,000 people. And Careem, an app that arranges taxi rides, was bought by Uber for around $ 3.1 billion in 2019. Both are great successes for the founders.

Scarce state aid

But even if start-ups in the Near and Middle East can ensure technical, economic and social progress – they face different challenges than in Europe. The US economist Jamil Wyne has been dealing with young companies for years. “Not all governments in the region have the same access to resources or the same ethical standards,” he says. “If you look at the United Arab Emirates, for example: They can offer start-ups not only money, but also a well-developed infrastructure.”

On the other hand, business founders in Jordan, for example, had a much harder time, says Wyne: “There are also many bright minds here, but government support is worse.” Even if all countries in the region agree that it is worth supporting start-ups – the level of support is very different, says the US researcher.

“Develops a thick skin”

Hala is also aware of the problems. There is far too little financial support in Egypt and, at the same time, far too much bureaucracy. And yet: “With all due respect – nobody from the West understands the needs of the people here,” she says. “They neither understand the system, nor the people, nor the thousand little things that have to be considered here.”

And women in particular would not have an easy time of it. “I would advise young women who want to start a business one thing: develop a thick skin. Do not expect any praise or that you will be treated fairly. You have to realize that you are ten times stronger than anyone wants to tell you.” Hala and her two co-founders are currently working either in the café or from home. But she is hoping for new customers and an investor, she says – and an office of her own. That is the next big goal.