Ecosystem

Opinion: How accelerators in MENA can actually enhance the quality of startups

Abdulaziz Alloughani, the Managing Partner with Faith Capital, shared his observation about startup programs on Twitter with this tweet:

“Despite a plethora of early stage activities in the MENA region (co-working spcaces, incubators, accelerators, private/public funding, mentoring..etc), the quality of startups graduating from many of these programs remain a serious concern.”

Inspired by Abdulaziz’s tweet, I’d like to share some of my own experiences and observations about startups, where I see weaknesses occurring, and what programs can do to help enhance the quality of startups.

There are many ways we can judge the quality of startups: the quality of the product, their strategy and awareness of market trends, their business model, their marketing and how they communicate their value proposition, how they hire employees, managing costs, etc.

An Overlooked Dimension

For me personally, the biggest concern is in addressing the psychological apprehensions of startup founders: bad selling tactics are often the result of fear of selling. Many startups fail to launch because they fear failure. Many startup challenges stem from fears and internal struggles.

These psychological factors need to be addressed head on.

Unfortunately, many (if not the majority) of programs either:

1) Romanticize entrepreneurship

2) Focus purely on technical skills

Once startups complete a program, there remains a HUGE gap between ambition and execution.

Why?

The psychological obstacles have not been addressed.

And I’ve seen MANY startup founders join programs, NOT to push their startup forward, but as an excuse to delay execution: learning is seen as a step forward, but it’s often a distraction from the actual work the startup has to do.

This is especially the case in ideation phase, where the levels of intimidation and uncertainty are extremely high, and startup experience is often low.

What Makes Startups Succeed

For startups to be successful, founders have to ensure:

1) There’s a real problem and strong enough pain to build a solution for.

2) They’re constantly growing the number of potential/actual users.

3) They have a business model that can sustain them as a business and allows them to grow.

Startups can fail for many reasons, and startup programs should ideally help startups identity the multiple weaknesses in the idea/execution of a startup. This is where 1-on-1 mentorship can be enormously helpful: a mentor is giving advice on the specific situation of a startup

Programs that help with pitching, for example, should focus on both SUBSTANCE and DELIVERY:

1) Is the argument being made for the startup/idea a strong one?

2) Is the argument being presented in a clear and compelling way?

No substance = bad pitch, no matter how engaging the presentation is. Yet I often see many startup pitches that are lacking in substance and make glaringly obvious mistakes, yet they program they had joined didn’t point out these obvious weaknesses.

One area of weakness many startup programs seem to have is failing to address a paradox when it comes to startups, which founders, mentors, investors, as well as startup programs need to take into account:

A startup is expected to present proof of need (product-market fit) AND a viable business model.

But the latter often distracts from proving the former.

In other words: startups are expected to show both product-market fit and a viable business model, but pursuing both compromises the chances of success for the startup.

A startup should first worry about product-market fit: is there actual need? Where’s the evidence? Are potential users actually taking ACTION or just SAYING that the idea is great?

The business model can often be intimidating at first, so it needs to wait until product-market fit is achieved. Startup programs need to be aware of the need for such sequencing, without badgering startups to present a viable business model from the get-go.

What Startup Programs Can Do Differently

The best support startups can receive needs to be:

1) Comprehensive: Programs should not be limited only to finances or product, but the entirety of the startup

2) Ongoing: Startup problems are constantly changing, and support needs to be relevant to their current challenges

3) Honest: Mentors/instructors shouldn’t overlook weaknesses they see. Don’t sustain a founder’s delusion that his/her idea is great when it isn’t.

Tell founders the truth, but in a supportive way:

“I’m on your side, but let’s look this over again… I’m not convinced by X, can you tell me why you think it’s a good idea…”

4) Practical: Lectures detached from actual work can be useful, but the use is short-lived. It isn’t the best way to move a startup forward (again, we need to account for intimidation/apprehension when executing)

Get founders to apply what they learn!

It’s also important to address common pitfalls and help founders overcome them. I can’t tell you the number of times founders build a product with NO CLUE on who their competitors are.

How can you define a value proposition in the absence of competitors? Value is ALWAYS relative: your customers will judge the value you bring to them based on how it compares to other offerings in the market.

Another pet peeve of mine is unnecessarily long free trials. Some startups offer A YEAR of service for free!

Why? Offer a reduced price for early adopters, but charge them. This is part of the validation to prove that users are willing to pay.

Conclusion

A founder’s best friend is reality: the more they engage with customers and get real feedback on their product/price, the better. And that’s what matters at the end.

Programs should never distract or isolate founders from the real world, but encourage them to engage effectively with it.

VCs and private corporations can play a massive role in educating startups and helping them develop the necessary intellectual and psychological maturity to build great startups.

Money without education is often poorly spent. Educating founders allows them to educate others

If you have ideas on how to improve the quality of startups, feel free to share.

This article is based on the Twitter thread found here.

Haider Al-Mosawi

Haider Al-Mosawi

Co-founder at Sirdab Lab
Co-founder of Sirdab Lab, a startup hub in Kuwait that offers training courses and programs to support entrepreneurs looking to start or grow their businesses. He's also the co-founder of Catalyze Co, a UX design firm. You can connect with him on Twitter.
Haider Al-Mosawi

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