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Network On The Nile

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A presentation on the development of the Cairo tech ecosystem

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Network On The Nile

  1. 1. NETWORK ON THE NILE The Multiplier Effect at Work in Cairds Tech Sector eNDeavoR
  2. 2. The success of Cairo's tech sector can be seen in companies such as lTWorx. | TWORX° - Software firm founded in 1994 - Currently employs 700 people - Awarded “Partner of the Year" by Microsoft - Offices in Canada, Egypt, Qatar, Saudi Arabia, Switzerland, United Kingdom, and the U. S.A.
  3. 3. However, the influence of | TWorx isn't limited to its expansion and job creation. The firm has also spawned dozens of other Cairo tech firms. Influence of ITWorx (1993-2014) -z; ::: ' I -rt ' ‘ 0 I [G T» H I T. u gum, | IVE ? ,:, ,_, ,,, 'I. ;‘ U ‘_ T. I 4 0 Hi “» | @~Ti M ‘ ‘ 4 :1 TTTTTT . <u ; _ . ‘ur. - T’! ,; -». TiiT «S-V‘: E: Tv. rTTvuu‘)- ‘T _ H. I” is , ,.3L-,1,“ vé n. ‘. T M . .i . ... T N I 7 . IVA not mu» run‘ run was mu mu ‘fllflullfl . . . ‘A Legend. '5 mm‘ 3 5 . “‘ ‘ii. ., . i 1 , , . ,,, «,5 '1“ «. B? ‘l )-. r. umor«. si11;: [nk"vl T FOUNDER ——e—> FORMER EMPLOYEES T) INSPIRATION
  4. 4. We studied the entire tech sector to find additional instances of connections among companies. METHODOLOGY We asked more than 200 Cairo tech founders five questions: - Who MENTORED you as you built your company? Who INSPIRED you to become an entrepreneur? Who INVESTED in your company? Where were you EMPLOYED before becoming an entrepreneur? Have you POUNDED any additional companies?
  5. 5. The Cairo tech ecosystem was very small in the early 1990s. Cairo Tech Sector Network Map (c. 1998) Legend: mu. 7 p r. i:T~r: oi= :Ti11:= T) rouuosa e> roman mnovzrs T) msvuumon
  6. 6. The sector began to expand more quickly through the early 2000s. Cairo Tech Sector Network Map (c. 2006) o -—~T u 5,‘ . _‘ .0‘ __ .9‘? 0.. Bit mo mu 5 ga—- 19- rats Founded . ;. . _ Legend: D . _ ‘ : Cu . ___ ‘T --—-T T) MENTOISMIP Tb mvemnem -T-> rouunsn T-> semen zumovess T-T) msmunou
  7. 7. The number of tech companies more than doubled in the next four years. Cairo Tech Sector Network Map (c. 2011) Legend: y. r. i:N: oi= :Ti11:= T) rouuosa e> roman mnovzss -Ty INSPIRATION 27 "in T. -2 'T o . . or, ‘_ . 9'" - T; — . -_ . ____ - o‘_ . ' 5 ‘. .. r-‘. »~ . °{'. : gt 3 . .., ‘(>4 i’- . 0: . ____ - . . T “: '5). — ' I- _ n. . -— ‘. ;_. _ '3: -'. ~. ' 3., i -. .. ': -.. - ‘.7 0.. . . :_c :0- . .:_ "o'_ l__ '3 ' L T". 0.. .y. . 0- ': -P 0.--. _. .., __ -. .” ’'''. ‘m ‘‘’‘. ;‘o: . '3- "‘— '5. 0; a. Q» - I . :7 “. : V ‘ ‘z'’ 7 ( 0- {T -. . " " ‘ 3 0- H _' V amp. . Th. .. 3;- -'7--—. "-‘ V. ) . . ‘__o. .. . .. . t 5 _ 3:; _ . u. . '- . "5.. ._
  8. 8. Today, the Cairo tech sector is well-developed and deeply connected. Cairo Tech Sector Network Map (C. 2014) Legend: Size of iii! -ii: veils-:15 '. T"rE Mil/ :4'IL: & ct the E-nzrepr-an-'_‘uv; at anti‘ C: :~'v*Tpar", » mass-:1 on their numb-2: at r. v.itgoTrg COF’IL‘((IDf‘S TD MINVOIIIII -T’ Xiflflfl T FOUNDER T) FORMER EMPLOYEES T-D INSHRAIION
  9. 9. Several local firms have become highly influential. Cairo Tech Sector Network Map (C. 2014) Legend: l‘ I 1‘ T)» Lit‘-i-'05 ‘W11- T-> FOUNDER ) FORMER EMPLOYEES -T) INSPIRATION
  10. 10. We analyzed the characteristics of the founders of Cairo's tech companies, such as their ages. 50 M 40 33 “U r: :1 .9 30 '6 )4 (U . o E 20 :1 7" Z I 10 WT — — T —— i 0 . _ _ _l ___ __ Under 20 21 to 26 27 to 32 33 to 33 Over 39 Founder age at first company's founding 90% Male 64% attended a private high school 10% Female 36% attended a public high school
  11. 11. Three local universities are responsible for graduating a large number of these tech founders. . l American UniversiiyofCairo ‘E 1} 4: i I l I l Ain Shams University 17% Cairo University 32% of Cairo tech companies have at least one founder who attended one of these three universities. M «wk “"" ‘ ~. “. " ° ’-'. —3. -. k:. ‘‘‘‘‘'’ I _ "' ‘ ’-’ -
  12. 12. The growth of Cairo's tech sector has been quite fast. Number of Cairo Tech Companies 400 I 1 35% Compound 300 l . v Annual Growth I ' Rate 200 i 100 0 a 2010 2011 2012 2013 2014
  13. 13. The connections between companies have grown alongside the the sector. 430 351 33% Compound Annual Growth Rate 200 187 136 Number of Connections 100 J
  14. 14. This growth has included all five connection types. Number of Connections 430 among Cairo Tech Firms 400 27% 351 33% Compound I 300 Annual Growth 260 24% Rate . zoo 187 I‘ 136 . ;:'-41 / . "1" 100 — I, - ‘-5-'_ 0 Q .3; '5 V T“ N N N N '19 Q? '19 '19 '19 investment Mentorship _ Serial entrepreneurship Inspiration ‘ Formeremployee ‘~ - . . , 2?‘ I . +—~' ‘ _ '- 7: [ C I ‘ / J
  15. 15. The growth of inter-company connections in Cairo has mirrored that of New York, the world's fastest-growing urban tech sector. Cairo —— Connections Growth NYC _ Connections Growth 136 2.070 H T if’ - L813 :5. 27/9 " 2 300 2 1 500 I 503 >3 T567’ 7 77 _S_2 ' 21% 8 24% g ‘ V r: 5 y r: 5 . 8 o 1 om . . 7 ° - 0 200 I8 ‘5 1.000 ~ — A » 8 3 _. E 156 2 719 ‘V " -3 3 "2.. . 2 z ! 'r‘_, .V, 100 500 v — Ni‘ T. ’ *2 0 ca 0 m '5 0 ea c '2, 1-. T" S, N, _ $90 $6» '19» $6» $5» Q90 155» ms '19» $6» ‘- lrlvfislflifjlll Memorshio _ SQYEBI entrepreneurship Inspiration — Former employee ‘ T. ‘ - 1.” I ‘ .3 t —; , .
  16. 16. Nevertheless, Cairo seems to lack angel investment — entrepreneurs aren't really investing in each other’s success. Cairo — Connections Growth NYC _ Connections Growth 450 i . "Ur'E' 400 — 2.000 ‘ mu 3‘; ,, __ C to K’ I ‘Ella 3 . '."{IU E . 8 E ‘ E = ; " ° 8 TV‘ U G O U ’ o 200 ’ 8 2000 , . : Sr- E I 71:: 7. = E Z 2 500 01, , , , o x. '1» '5 q o '» '1, '5 ’* ,6‘ '* ‘V o s, N, N -» '9 » ~«° 16’ 19 1° «.9 «.0 19 Investment is an area in which Cairo‘s tech sector lags behind while the ecosystem of each city grew at a similarly high rate over the course of a hve-year period. the amount of angel investment in Cairo barely grew at all. _ '
  17. 17. Cairo tech founders also cited a number of factors as major or severe obstacles to running their businesses: "/ 60 0 cited political instability. cited the lack of availability of top managers. cited the lack of availability of top scientists and engineers. 40"/ ’ . :~; 0 cited corruption. . ‘‘-
  18. 18. Cairo's tech sector lacks venture capital investment just as much as it lacks angel investment. Cairo: NYC: 1in1O Sin 10 companies received companies received investment from a VC. investment from a VC. . . » . .», -‘- 4‘ - L, -2-. ,. -_'v, . . . , -'2 . ~ 7: 4-. ‘ C‘ we w ' : -. -' 1:13;‘ -2-‘.3 «.29 :3,‘ «.557 4,? - ‘, . v 2 V ; 1 ’ ».
  19. 19. There have been very few major successes in Cairo. As a matter of fact, only three companies have managed to make a significant impact. SY. '.5D. § Ofi ». Iii‘. mi_~. iiiiI / ITWO RX‘ - Employs more than o Sold to Intel in 2011. “ H35 expanded 1500 peop[e_ throughout the world.
  20. 20. However, the founders of these firms have been very active when it comes to supporting their fellow entrepreneurs. Fr “Ir . .. ~i. -‘ Sy§D§oft wits». i rid ITWO RX‘ - Employs more than o Sold to Intel in 2011. “ H35 expanded 1500 peop[e_ throughout the world. ', 'v'. ,', o Directly connected - Directly connected « Directly connected I to 72? Comg. 'rriii: i. to '31: C0i"r"i:7.-”. iiiIT:7. to H3 cor. '.fi. -:. ‘;ic-f. Nearly of companies in the network are connected, either directly or indirectly, to one of _g ___; ‘ Cairo's three most influential companies. .. _.. ..«. ; . .: ‘J ‘ ‘ 1- ---~—- -- ’ - -~ '7‘ - v . - '92‘: , ms" ‘T’? C‘ - '3 1%’-’. -‘I: i? :;~. :‘. ‘ it‘ _- . AL. 3-, ». _‘v-. ;.-»——'-“—*‘— v. -. _ . .-- , :.— « ,1 an. .~. ... -7’-': It? ‘i. .
  21. 21. 7 5"/ _ O 70"/ I; C cited access to customers. The vast majority of founders ranked the factors below as either no obstacle or minor obstacles to running their businesses: "/ 8 0 Q Cited access to legal or tax services. 75"/ o cited licensing procedures and business and labor regulations. cited access to high—quality incubators and accelerators.
  22. 22. Former employees leaving to create new spinout companies are another strength of the Cairo tech sector. Nearly 30% of companies in the network were founded by former employees of other Cairo tech firms. T Of these, more than 3 third were founded by former employees of | TWorx. Sixteen companies in the network were founded by former employees of multiple other companies.
  23. 23. Today, the Cairo tech ecosystem employs thousands. 20,000 15,000 10,000 Number of Jobs 5,000
  24. 24. If it continues to create high—quality, high-paying jobs at its current rate, the sec- tor will go on to employ thousands more within the next six years. Projected employment if current growth rate is sustained 20,000 31% Compound Annual Growth 15,000 - - Rate Number of Jobs
  25. 25. : Thank You! You can rind this presentation and a set of interactive network rna, os at vvvvwcairotcChmap. Corn. "x. -: — -. > . A i ‘i. |)~ ":3. i -_ W‘ l «:3 law »- r. “ii. A . ~-_, :' . -/ I,_ X‘ , ' 2' . . , 41» . w:<t~. ... ‘t"-11:: -1-""_"“ 'E’. ~ _ «_4'--~? "<- . .A’ ;

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