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Startup Revolution Quietly Reshapes Middle East

Startup Revolution Quietly Reshapes Middle East
There's a startup revolution in the Middle East. / Credit: Middle East map to audience image via Shutterstock

When many Westerners think of the Middle East, they think of the steady stream of troubling, violent news coming from the region. While revolution, political instability and war have indeed rocked the Middle East, those media accounts have obscured a rising tide of tech-fueled entrepreneurship — and an often-overlooked business opportunity.

Online entrepreneur and venture investor Christopher M. Schroeder shared the same one-sided view of the Middle East that most Westerners have — until he began traveling extensively in the region starting in 2010. The co-founder of HealthCentral.com and investor in U.S. venture capital funds and social-media startups has traveled through Jordan, Syria, Egypt, the United Arab Emirates, Lebanon, Qatar, Saudi and Turkey.

There, he found entrepreneurs emboldened by the possibilities of new technologies, forging bottom-up change. And despite the region's continued unrest, Schroeder found Western investors and major tech companies like Google putting money into the new Middle East startups. In "Startup Rising: The Entrepreneurial Revolution Remaking the Middle East" (Palgrave Macmillan, 2013), Schroeder focuses on bringing this underground story to more Western eyes.

In an email interview, he told us why the real Middle East surprised him:

BusinessNewsDaily: How did you become aware of this under-the-radar wave of entrepreneurship?

Christopher M. Schroeder: I have been an Internet media entrepreneur and investor for over a decade and traveled the world (and outsource technology to pretty much every corner of the world). That I was surprised to see this also happening in the Arab world is a credit to my bias to the one narrative of the Middle East we mostly hear in the West (war/sectarian unrest). In 2010, friends who are leaders in the ecosystem invited me to a conference they held — 2,400 young people with a waiting list of 2,00 more — all building amazing things with software. It was clear access to tech is a global phenomenon that will change problem solving and innovation.

BND: What unique challenges do startups in the Middle East face? What are the unique opportunities there? 

Christopher M. Schroeder

C.M.S.: There is no question the terrible political instability weighs heavily everywhere there, and decades of challenges to infrastructure and education are difficult. But with technology, the new generation isn't waiting for traditional solutions, and in the midst of uncertainty, [they] build anyhow. The companies would look familiar to us in e-commerce and content and social networks. Problems like crowdsharing traffic jams or online education are very successful. And as the world is one click away, they are creating amazing tech in health, data, products and services that can reach markets anywhere.

At one level, business hates uncertainty. At another, uncertainty drives innovation. Some outsiders are sitting on the sidelines. Others are looking for opportunity. 

BND: What are the biggest misconceptions Westerners have of the Middle East? 

C.M.S.: I believe many Westerners have great difficulty in even considering hopeful scenarios, though, or really understand how this new generation is utterly empowered NOT to accept the expectation of their parents.  

China, India, Brazil offer amazing opportunities but significant challenges, too — investment in emerging markets is not easy. But the rise of the middle class everywhere, access to tech and mobile devices everywhere profoundly change the future. But we all tend to look at the next 10 years as a version of the last 10. And it never is.

Also, we tend to lump the region as one thing — what is happening in Damascus is much different than what is happening in Dubai.

You have to be patient in travel in these markets, but it is one of the most hospitable regions on earth. People were generous with their time, their insight and hospitality. Made travel much easier.

BND: Are worries about infrastructure (education, etc.) overblown? What real ways are there to overcome these challenges?

C.M.S.: Not overblown at all. They are real. Great social enterprises are going at education challenges, like [Amman-based nonprofit] Ruwwad, which I talk about in the book. And tech is, in this great quote, "hacking the culture." So no surprise, there are startups in online/video/mobile education to supplement the challenges.

BND: How does the reality of the role of culture and women in Middle Eastern business compare with what Westerners imagine them to be?

C.M.S.: That women are a real force (one-third or more of entrepreneurs are women) tells a ton of what is happening there. This is totally out of our [usual] narrative, and they are amazing entrepreneurs and amazing talent being unleashed broadly. Culture and religion is a true inspiration to the entrepreneurs I meet, but when any institution demands hierarchical, lock-step adherence and keeps half of the population at bay (women), it is hard to see how that will be globally competitive.

BND: What do you hope to teach people with this book?

C.M.S.: I hope Westerners will begin to reframe their view and narratives of the Middle East, and begin to think about what may come in a world where half of it will have access to super computing in their pockets (smartphones, etc.). How to engage in societies building more bottom-up than top-down. I hope young people in the region are encouraged by this book, as it confirms all they are doing. May their business communities and political communities better appreciate the opportunity in their midst.

BND: Do any quotes still stand out to you today from entrepreneurs in the region? 

C.M.S.: They all had amazing stories; hard to pick one.And many quotes — but I love the concept of "no wasta on the Internet," which I hear often. "Wasta" is the system of favors, of getting stuff done by knowing people. On the Internet, to compete, you move faster than that. You can't hide as it's about transparency. It drives success to breed success.

BND: Where do you see business and startup environments in the Middle East in five years, 10 years or longer?

C.M.S.: I have no crystal balls. What I can tell you is there will be a LOT more people with A LOT more tech on their person. There is no going back.

Follow Michael Dhar @michaeldhar. Follow BusinessNewsDaily @BNDarticles. We're also on Facebook & Google+. Originally published on BusinessNewsDaily.