Conquering the World
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Jordanian tech ventures may have found their feet locally, but they’re increasingly branching out globally.
A barrage of painful challenges will face any company that wants to move operations beyond its home turf: coping with new legislation, adapting to a different culture, or recruiting the right labor. Yesterday, that was enough to deter any growing business from entering new markets. But today, with the emergence of sophisticated technology, that is no longer the case – especially for tech ventures.
In the world of budding tech entrepreneurs, it does not matter where you are from. An example of this is the thriving startup scene here which is giving birth to tens of new tech ventures that are attracting the attention of investors. In a list published last year by the founder of the California-based venture-capital firm Finaventures, Amman was ranked the tenth best city to start a technology company. Renowned journalist and author William Cohen estimated there is around $300 million in venture funding to be invested in Jordanian startups.
But despite the rising trend of tech entrepreneurship, Jordan still lacks some fundamental ingredients. The physical and digital infrastructure is still not advanced enough, the economy remains shaky, and resources are scarce. This has pushed local tech ventures to look beyond its borders. More and more companies are setting up bases in the Gulf, Europe, or even the United States, in order to access more resources, gain exposure, and learn from other highly developed tech companies.
LOCAL TO GLOBAL
Emile Cubeisy, founder and managing partner of Silicon Badia and former managing partner of IV Holdings, believes a big part of the push towards the globalization of Jordanian tech ventures is based on the need to tap into more mature ecosystems where the chances of succeeding are greater.
Silicon Badia is an accelerator program and a venture capital fund that is attempting to connect the startup scene in the MENA region to entrepreneurial ecosystems around the world. For that reason, a good number of the startups in Silicon Badia’s portfolio are operating across multiple markets at the same time.
“There are many pluses when you plan to expand outside the Jordanian market,” Cubeisy said. “There are different types of expertise that are not necessarily located in our country. I feel that Jordanian entrepreneurs are starting to look globally to find such expertise. The fundamental point of departure is more about how a company can make its business stronger, and less about making a product stronger. The primary focus of globalizing a business is how to increase the likelihood of Jordanian companies’ success.”
Cubeisy said companies wanting to globalize their operations will take on a huge market opportunity, but this is coupled with equally huge challenges. It is not easy to take your company from an ecosystem that isn’t fully developed to an enormous one that is highly sophisticated, he said. Additionally, the local to global equation is about having the right conversations. The more you know about the relevance of the product you are building, the higher likelihood you have in succeeding in other markets.
“I don’t think you start off by saying you want to build a global company – you should say that you want to solve a certain problem in the market through your company. And then it boils down to the nature of the problem you are solving – is it a local problem, a regional problem, or does it resonate with a global audience? There is no right or wrong answer,” Cubeisy added.
Hagop Taminian, investment principal at Silicon Badia, believes that one doesn’t take a company global by decree. The potential of a company to be global is built into its founders, its product, the problem it’s addressing, its positioning, and its ability to understand and penetrate global markets. It also requires very high attention to detail in terms of things like design, language, and user experience: global markets are more competitive and less forgiving.
“In terms of the globalization of Jordanian ventures, there are startups that are going after regional markets and others going after international markets,” Taminian said. He put forward the review platform Jeeran as a good example of how to build a product that is tailored mostly to the region, while he believes online translator Dakwak is developing technology that is fundamentally global. “A company located in the United States, or a company located in the Middle East, can use Dakwak’s products and extract value from it in the same way,” he said.
To Taminian, the nature of the Internet as a massive, open, and connected platform is allowing innovation to happen everywhere in the world. It’s no longer restricted to the two or three places that were responsible for producing it historically; they’re still the leaders by a big distance, but everywhere in the world you’ll find startup ecosystems that are generating ideas, talent, and innovation. The startup phenomenon that is happening in Jordan is happening everywhere in the world, and the entrepreneurs leading it are all fundamentally the same as entrepreneurs all over the world.
When Mixed Dimensions opened in Amman in December 2009, the startup’s focus was to be a content provider for the gaming industry. A year later, the company switched its focus to creating technology purely for game developers. They set out to streamline the production of any game by providing developers with the right tools to module 3D objects in a cost effective, highly dynamic way.
But CEO Muhannad Taslaq soon decided to change the course of his company yet again, this time taking it global.
“We realized that we can use our technology in other portfolios, and that’s why we’re now getting into the field of 3D printing,” he explained. Mixed Dimensions has shuttered its office in Jordan and is now banking on its presence in San Francisco, the United Kingdom, and Japan.
When it comes to the globalization of a tech startup, Taslaq believes that the most important thing is the mindset of the entrepreneur. If a startup has the vision to expand outside of Jordan, the entrepreneurs working in it should intensify this vision by reaching out to other markets from the onset. But he stressed there were still no hard and fast rules. “We are now operating across different markets, but not all tech ventures have to do that same,” Taslaq remarked. “The globalization of any tech startup depends on the idea and the product. Some ideas can be applied in foreign markets, but other ideas can only be applied in Jordan.”
Unlike Taslaq, Muhannad Ghashim, CEO of ShopGo, a newly established platform that helps retailers jump on the e-commerce bandwagon by setting up online stores, already had it in mind to take his company regionally from the get-go. “We started in March 2013 with an aim to help offline merchants with no technical backgrounds to create an online store for their business. We already had it in mind to target the entire Middle East,” Ghashim said. ShopGo has offices in Jordan, Saudi Arabia, the UAE, and is now opening one in Lebanon. “We can expand to a variety of markets because our platform is highly flexible,” he said.
Despite having successfully opened four offices in the region, the challenges ShopGo faced did not make the process easy. It was difficult to find and forge agreements with partners outside of Jordan, particularly logistics and payment providers that understood the company’s mission. Some countries rely on international service providers, such as DHL, but others depend on local companies for their more competitive prices.
Still, Ghashim is reassured that working across multiple markets in the Middle East has more advantages than disadvantages. “Expanding to different markets has given us huge awareness and a competitive advantage. If a merchant in Jordan decided to expand to the UAE, they can seek our help to see how to operate successfully in that market. All they would need to do is find out how to operate legally in a foreign market,” Ghashim said.
Working across four different markets simultaneously also helped ShopGo scale up its size. “The more regional-oriented a company becomes, the bigger it will scale,” he explained. The staff at ShopGo is composed of twelve people from Syria, Iraq, Romania, and Ukraine, and this has helped Ghashim cope with the differences that exist in markets outside of Jordan. “When I first thought to expand to the UAE, I thought they would never accept what is normal in Jordan. I learned to be flexible in order to understand what foreign customers want regardless of what I am used to here.”
What Ghashim and Taslaq point at can be a lesson for up and coming tech startups that want to take advantage of the abundant resources, expertise, and customer base available in foreign markets, particularly those of the Gulf, Europe, and the United States. Even for small tech enterprises whose offering can be valued across different countries, setting up base outside of Jordan might not be an option anymore, but a requirement necessitated by the globalization imperative.
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