Abraham Karmack: Starting Up Knowledge Businesses in Qatar

1. Starting Up Knowledge
Businesses in Qatar
Advice from the trenches…
Or what we’ve learned in the last year
...in 10 minutes or less
Doha Tweetups Abraham Kamarck &
18 October, 2011 Haya Al Ghanim

2. In the last year, we’ve changed strategies
almost on a weekly basis
The reality of the environment is that we
are bleeding edge and need to maintain to
succeed in the long-haul

3. The Start-Up Paradox….
To create
something great,
you must be both
Patient &
Impetuous at the
same time….
Impetuous = hasty and precipitate in action

4. The Start-Up Paradox….
It’s like running a
Marathon, you
have to be ready
to go the
distance…but
you can’t ever
stop running.

5. The Start-Up Paradox….
There will be major ups & downs.
Success can only be
judged over time.
Steve Jobs was
once fired from
Apple (1985).

6. The Start-Up Paradox….
Start-ups are difficult
everywhere, but they
are especially hard in
Qatar.
WHY???

7. Because…..
QATAR is a START-UP
Qatar is trying to do what no one
has ever done before…
“Qatar, Punching Above it’s Weight..”
– Foreign Policy
“Tiny Qatar’s Big Plans May Change Mideast”
– Bloomberg Business Week

8. …and what no one thought
Qatar could do…
Which is a bigger accomplishment?

9. Qatar is a start-up.
2030 is still a long way away.
Everything in Qatar is
constantly changing.
And we ALL need to help
realize 2030.
We have to keep running.

10. As Start-Ups we have to Help
Build the Start-Up Environment
#StartUpQatar
So now let’s talk about the
Start-Up Environment in Qatar…

12. Start-up Myths in Qatar
1. Qataris are not entrepreneurial…
2. I only need the expat market…
3. 2022……..
4. I have a start-up, IF….
5. Franchises = Gold

14. The Current Challenges…
1. Direct Challenges
2. Systemic Challenges
3. Cultural Challenges

15. Direct Challenges (just a few)
Online Payment Gateway
Set-Up Fee: Q.R. 28,750
#QNBFail?
Also,
• Municipal Registration requires Commercial Offices
• Licensing Problems

16. Systemic Challenges
(1) Last 10 years growth has been funded by
Government Spending. (Directly & Indirectly)
Q
Companies
Hire Staff and Pay
Salary & Benefits
Employees
Spend on Rent,
Retail, Restaurants
and Range Rovers

17. #QatarRentOuch
Systemic Challenges
(2) HIGH…no Seriously,
Seriously, Ridiculously
HIGH Asset prices
Doha has the 12th most expensive office space in
the world (QR3,248 or $887 per m² per annum).
Only MENA country in the top 20
Most expensive space in the world when adjusted
for office population.

18. Systemic Challenges
(3) The Talent Vacuum
The Talent just isn’t here
in the needed numbers
yet…
There are only 200K “White Lindsay Lohan is often called
Collar” workers in QATAR* a “Talent Vacuum”
The Problems: The Seeds of the Solution:
• Young Qatari population QF & Al Jazeera
• Sponsorship System Plus….Doha is not ready
• High Asset Prices (traffic, schools, sewage?)
*qix.gov.qa

19. Cultural Challenges
The Cultural Barriers to Knowledge Growth
1. The Majiles Scenario -
“Your Successful, Know-it-all Uncle.”
2. The Paradox of Success –
“What got you here, won’t get you there.”
3. Sweat Equity –
“Ideas are Cheap, Execution is Everything.”
4. Angel Investors or the lack of them

20. Angel Investing…a snapshot
Angel Valuations are difficult because there is often not
much to value, so industry norms develop
In the US an Equity Norm is 20% for a US$ 500K investment.
We need a norm for Qatar. i.e. 20% for QR 500K
#QatarAngels
Source: Mark Suster,
www.bothsidesofthetable.com

21. Start-Up Opportunities in Qatar
Areas with the greatest potential for scalable growth
(The Big Bets)
#NewEconomy - Everything needs to change
e.g. Sustainable Solutions, Smart Manufacturing
#SOCENT – “Bottom of the Pyramid” Strategy
#HUB – Media, Education & Research
#FailWell – You Are Going to Fail

22. #FailFast
#FailSmart
#FailWell
In the VC business, if you hit.300, you are doing well.
If you hit .400, you are going to the hall of fame.
But it is how you behave when you strike out that
defines your reputation.
No throwing bats.
- Fred Wilson

23. Now Go!
…and Don’t Stop Running

24. Thank You!