Egypt’s tech business scene is burgeoning, despite financial and bureaucratic hurdles.
Cairo, Egypt – One warm day in early July, Omar Gabr and Moataz Soliman, the 22-year-old founders of Egyptian startup Instabug, sat in a cool, dark flat in Giza – windows and shutters firmly locked – contemplating their next move.
The duo were scheduled to appear on stage at San Francisco’s MobileBeat 2013, publicly unveiling the launch of their product – an innovative bug-reporting tool for mobile application developers, activated by users simply “shaking” their iPhone – in front of dozens of investors, CEOs, and Silicon Valley big-shots.
Instead, they followed the event via a live Twitter feed, as armoured personnel carriers patrolled the streets in front of their office. Widespread protests and violent clashes across Cairo ground the city to a halt. The US embassy had been closed for days, and at the last minute, they couldn’t get visas.
“It was frustrating,” remarked Soliman, Instabug’s chief technology officer. “It’s the event that we’d been looking forward to for four to five months.”
Yet despite the political instability and violence on the streets, they, like most other young startup entrepreneurs in Cairo, simply had to push on.
years founding startups in Egypt. “But there wasn’t an entrepreneurship ecosystem.”
O’Donnell said that the main barrier to startups was that Egypt was “socially repressive for entrepreneurs – and the entrepreneurship landscape was challenging, filled with bureaucracy.”
Another hurdle for young entrepreneurs, according to Muhammed Radwan of icecairo, a new co-working space for green-tech startups in Cairo, was a lack of hope. “People had no hope that things could change,” said Radwan. Now, however, “they are taking matters into their own hands, not waiting around”.
New ecosystem emerging
On the heels of Egypt’s second political revolution in three years, hope for young entrepreneurs might be soaring, but there’s more to it than just youngsters with ideas.
A supportive ecosystem of competitions, networks, and co-working spaces are emerging to help them navigate the system, fuelling a new culture of entrepreneurship.
At The District, a co-working space in Cairo’s Maadi area, dozens of entrepreneurs, engineers, and workers in the creative industries collaborate on new ideas, apps, and software. Across town, Al Maqarr, another new co-working space – founded by four entrepreneurs in their early 20s – brings together NGOs, student groups and startups. Both spaces, just two out of six in Cairo, are already sustainable businesses themselves.
For growing companies, however, sometimes co-working is not enough.
Cairo has seen several incubators spring up since 2011 – copies of successful Silicon Valley models such as Y-Combinator, which spawned Dropbox and AirBnB – all working to accelerate the new startup economy. One incubator, Flat6Labs, has already invested $10-15,000 in each of more than 30 technology startups, offering them a free place to work, mentorship and connections.
“We are a whole startup support ecosystem, not just a venture capital, or accelerator, or incubator,” said Ramez Mohamed, CEO of Flat6Labs.
The startups emerging from Flat6Labs are as unique and diverse as Egypt’s 84 million-strong market. For example, Solarist, founded by 24-year-old Dina Mosallem, has developed an affordable, portable, solar-powered water desalination machine.
Another company, Taqalid, is building a web and mobile platform to bridge the digital divide of death for a new generation, taking the “process of death” – obituaries, announcements, and other services – online.
Yet another, PieRide, is helping customers beat the cost of Cairo’s atrocious commute by essentially crowd-mapping carpooling.
While there’s no shortage of great ideas emerging from Cairo’s hubs, the challenges for young Egyptian entrepreneurs remain immense.
One rising point of contention is the issue of military service. The compulsory conscription of all Egyptian men aged 18-30 – regardless of class, education, or employment – into military service for one to three years can derail young entrepreneurs eager to run businesses fresh out of college.
Mostafa Hemdan, the 23-year-old CEO of Recyclobekia, which exports Egypt’s growing mass of electronic waste abroad for green recycling, says that conscription is “the worst thing ever I have found for my business… the worst thing in my life”.
Every time he travels abroad for business meetings, to Germany or China, he must navigate endless university and military bureaucracy for permission to leave. He has been denied or stalled multiple times.
“What do I tell my investors when I can’t travel?” he complains.
The situation has become so bad that he’s now hiring an older chief operations officer, who will handle day-to-day operations and travel, while he considers enlisting next year.