Entrepreneurship

Nawaf Al Sahhaf, CEO of Badir, leading Saudi incubator, talks about Saudi startups, entrepreneurial ecosystem and the future [Interview]

BADIR is one of the most popular names among the startup community of Saudi. It’s a government technology incubator program that was launched by King Abdul Aziz City for Science & Technology (KACST) in 2007. It comprises of different incubators but is mostly known for its ICT Incubator that has hosted some of the most successful Saudi startups yet, including Morni & Foodics.

We had a chance to sit and chat with Nawaf Al Sahhaf, the CEO of BADIR who has been with the program for more than six years now. Here’s everything he shared with us.

MENAbytes: Please tell us a little about yourself.

Nawaf: I have worked in the Badir Program for Technology Incubators of King Abdulaziz City for Science Technology (KACST), for the past six years. During 2013, I became the CEO and have restructured the organization to strategically position it to become an internationally recognized world-class incubation program and play a major role in improving the effectiveness of the Saudi entrepreneurial and innovation eco-systems.

During 2012 as BADIR’s Commercialization and Funding Director, I have been instrumental in developing SIRB network, an alliance of investors, technology entrepreneurs and innovation supporters in Saudi Arabia.

Prior to joining BADIR, I worked as a Senior Consultant with the Saudi Industrial Development Fund (SIDF) assisting companies in researching and implementing business opportunities in the construction, manufacturing and petrochemicals industry sectors in local, regional and international markets.

In addition, I have worked as a volunteer consultant with the Centennial Fund since 2004, mentoring young Saudis who wish to establish successful businesses.

“Badir Program covers four main roles: incubation, acceleration, funding facilitation, and entrepreneurship awareness.”

MENAbytes: What is Badir and how did it start?

Nawaf: BADIR Program for Technology Incubators, founded during 2007, is supported by King Abdulaziz City for Science and Technology (KACST). The main purpose of BADIR is to create and nurture a knowledge-based society in Saudi Arabia. During a decade of its existence, BADIR has activated numerous technology business incubators and promoted entrepreneurship across the country.

Badir Program covers four main roles: incubation, acceleration, funding facilitation, and entrepreneurship awareness. At the beginning, we started with just one incubator in 2008. Over the last ten years, we have been able to expand from one incubator in the field on information technology to five incubators in three cities across the Kingdom: communication technology, biotechnology, advanced manufacturing and mixed technology.

MENAbytes: How exactly do startups apply to Badir and who selects them? What’s the selection criteria?

Nawaf: BADIR program is open to all technology entrepreneurs from Saudi Arabia that have an early-stage technology-based project or a prototype or even an initial concept for a product that meets the specific conditions and requirements for incubation.

The selection process begins with a simple but rigorous screening system based upon international best practice to focus appropriate resources on the ideas and applicants most likely to succeed. The initial screening process separates inappropriate prospects from those with real commercial potential. A detailed business plan is to be submitted by the startups that is reviewed by BADIR management. Finally, BADIR and startup prepare a management plan for each accepted case. The business plan documents where the business needs to focus on actionable improvements and milestones with instructions, deadlines, and a formal meeting schedule.

BADIR manages cases using regular expert reviews. This approach encourages a continuous planning and improved environment for healthy business growth. Performance is measured against the agreed-on business plan that is reviewed by BADIR staff and amended at formal review meetings, typically quarterly. This is to ensure business plans remain accurate and useful as they are adjusted in light of external circumstances and actual performance.

MENAbytes: What do startups get from Badir?

Nawaf: There are many services BADIR offers to startups and include assistance in developing the business plan and arrange legal, administrative, and marketing advice. Badir provides seed funding for approved projects in the accelerator stage. For more mature companies, it organizes quarterly workshops and meetings to introduce business angels to entrepreneurs. BADIR helps the incubated client in developing their presentations to pitch to the potential investors.

BADIR program also offers a help service to obtain the invention and ownership patent and access to the modern utilities and facilities like reverse engineering, 3D printing, product quality control, and engineering evaluation. Workshops and conferences with participation by international experts are organized about industries, intellectual property, engineering designs etc.

MENAbytes: How many startups have you hosted until now?

Nawaf: During a decade of its existence, BADIR has succeeded in serving more than 200 startups. The program currently has 127 technical projects incubated through its five incubators, generating a market value of SR331 million ($88.26 million) for 34 of these projects alone.

MENAbytes: There’s an impression that Badir does not have fixed incubation period. We know some startups which have been there for more than 2 years even after raising substantial funding. Don’t you think they are costing the opportunity to young startups who could’ve joined the program instead?

Nawaf: Typically, incubation time is 3–4 years, but the actual time period depends on each individual case. An incubated client is eligible for graduation from BADIR’s incubation program when the business has achieved the following milestones: Sustainable profitability, entry into a marketplace, establishment of an initial customer base, effective management system & team in place with adequate investment for subsequent growth secured.

We are now adopting a funnel technique that will allow us to accept a larger number of startups and funnel them down various stages as they progress from the idea to prototype, to launch and later to growing and scaling. This will be done by opening public co-working spaces in line with the incubators where entrepreneurs who still don’t meet the requirements for incubation or acceleration can rent low-cost office spaces and work during their idea stage within Badirs community of entrepreneurs. This will allow Badir to better utilize its resources in helping a bigger number of idea owners. Those who make progress with their ideas will qualify to the accelerator where they will begin to receive the free services that Badir provides to those enrolled. Once the accelerator stage is successfully completed, the entrepreneur qualifies to the incubator, where he will receive more support until graduation. In this model, we look forward to giving more opportunities to entrepreneurs than ever before.

“Saudis, and Saudi companies, when properly empowered, can deliver quite extraordinary innovative solutions to local and regional problems.”

MENAbytes: Which startups do you think are the biggest success stories to come out of Badir?

Nawaf: In ICT, we have MORNI, which revolutionized the road-side assistance experience for vehicle owners. Today it is the largest roadside assistance company in the region with over 8000 providers. In 25 months, it grew from two co-founders to over 40 employees. There is also Quant which achieved amazing strides in data analysis and actuary sciences, selling their advanced software to companies to organize and assess big data.

Another success is Foodics Company that provides a cloud-based iPad POS solution for complete restaurant management. Their system is being used by over 350 brands in Saudi Arabia, UAE, Turkey, and Egypt. The company currently employs 52 employees. Foodics recently closed a SAR 15 million ($4 million) investment round, led by Raed Ventures and Riyad Taqnia Fund (RTF) with the participation of Neseel Holding and 500 Startups Fund.

When we look at other fields like Biotechnology, Diabetic Science International, is a company incubated at BADIR Biotechnology Incubator, where the company has successfully developed a bandage lined with a substance extracted from shrimp shells that has natural healing properties beneficial especially for diabetics. This product is now on the verge of industrial-level production. Another startup at our Bio-Incubator namely “Brewdan” has successfully developed a safer and healthier energy drink alternative that is made from the Hibiscus plant. Brewdan plans to enter the market during the first quarter of 2018.

Saudis, and Saudi companies, when properly empowered, can deliver quite extraordinary innovative solutions to local and regional problems. We foresee further innovation in solving issues in the fields of medicine and energy, with the use of IT applications to innovate solutions that further streamline the everyday tasks that we do.

“BADIR is focusing on expanding its innovation and entrepreneurial hubs across the Kingdom in order to create 600 startups and 3,600 jobs by 2020.”

MENAbytes: What do you think makes you guys different from other regional incubators and accelerators?

Nawaf: We go the extra mile. The number of active incubators in the Saudi Arabia compared to 2007 has risen dramatically, covering more ground and serving more entrepreneurs and BADIR Program is one of the main players in nurturing and spreading entrepreneurial culture in the Kingdom. When BADIR started in 2007 there was no angel investment network, there was no network for incubators and accelerators in the kingdom, no seed funds existed and none of the regulations in place today existed back then.

BADIR proudly made steps in creating the missing links in the ecosystem. During 2009 we created the Saudi Business Incubator Network (SBIN) paving the way for unifying the regulations and standards for operating the business and accelerators in the kingdom, down the line BADIR also created the Saudi angel investors network (SIRB) which filled a big gap between the entrepreneurs and the investors. In addition, KACST’s established “Taqnia” company for investment with a capital of 500 million Dollar to support emerging technology projects.

Today, BADIR is focusing on expanding its innovation and entrepreneurial hubs across the Kingdom in order to create 600 startups and 3,600 jobs by 2020. BADIR is also creating a soft-landing program to diversify its startup portfolio and increase capabilities among local startups, as it has been seen that foreign residents are essential elements in the ecosystem.

Badir has gone beyond its boundary and played a role in developing the national incubation policy, creating angel investment network and filling the gap caused by the misalignment of culture between university and community by creating university entrepreneurship programs. These and many other initiatives were done by Badir to be an enabler in the ecosystem and make us different from the other Incubators and Accelerators.

MENAbytes: What are your thoughts on Saudi startup ecosystem? Where do you see it in five years from now?

Nawaf: The Saudi Arabian startup ecosystem has come a long way over the past ten years. Ten years ago, there was no incubator, no accelerator, no angel investment network and no proper funding options. Now all these programs have established in Kingdom by participation of public & private organizations. However, Saudi entrepreneurs are still facing various challenges as regulations and bureaucracy, access to funding, and access to talent. During next five years I see Saudi startup ecosystem going to a second level where it will be at par with the developed world. The local entrepreneurs will have access to global markets.

MENAbytes: Please name your favorite local, regional and international startups.

Nawaf: Favoritism is subjective in nature, and I would prefer to provide an objective answer to this question, so I will discuss my favorite startups in terms of the business model they developed. Speaking locally, I was impressed by the business model developed by MORNI, notably in the way they solved the money collection issue, where customers were more adept to paying with cash rather than electronic payment solutions. The team behind MORNI found this to be their most critical issue and they somehow pulled it off, managing to track and collect revenue in a service where cash is more favorable for customers and providers alike. Internationally speaking, I was very much impressed with the scalability of Dropbox and how they successfully perceived the future demand for user cloud services. This company tailored the same product to almost every segment of cloud services customers, serving individual users, small businesses and large ones alike.

MENAbytes: Which international accelerator/incubator do you look up to for inspiration?

Nawaf: BADIR, as a comprehensive national program, provides acceleration and incubation services, community events, co-working spaces, access to mentoring and networking, access to angel investor networks, in addition to soft launches and soft landing. In covering such a broad scope, we aspire to become the leading provider of incubator and accelerator services in the world.

We can’t simply look at one accelerator or one incubator and aspire to be like it because we have a broader objective. But when we speak about our programs individually, for instance, accelerators, we aspire to operate at a level at par with US West Coast accelerators.

“The biggest challenges faced by Saudi entrepreneurs are local regulations & bureaucracy, access to funding, and access to talent.”

MENAbytes: Access to funding is still one of the biggest challenges faced by startups all around the region. How is Badir helping startups with that?

Nawaf: During the past years, several entrepreneurs incubated under the BADIR program faced many difficulties when searching for appropriate funding for the establishment, growth, and continuity of their business. Consequently, the King Abdul Aziz City, represented by the BADIR program, studied the experiences of other countries and concluded that the solution lies in the so-called individual investors industry or the ‘Angel Investors’, who could provide innovative financing solutions to bridge the funding gap and investment in the early stages of the life of the project.

In May 2012, BADIR program succeeded in the establishing a network of individual investors (SIRB) to fill funding gaps and overcome obstacles that hinder the transmission of research projects to its actual fruition. It also helped to contribute funding and support business leaders in the Kingdom through the formation of a network that combined a number of distinguished businessmen and individual investors wishing to support emerging ventures or to participate in expounding the success and growth for the sake of continuity.

At this moment, Badir is providing seed funding for accepted projects in the accelerator stage. For later stages, we facilitate the funding through matching investors with entrepreneurs via our annually held demo days.

MENAbytes: Incorporating a business in Saudi is not very easy. How does Badir help its startups with that?

Nawaf: We provide services to startup companies in the idea stage as well as those that have ready products and can enter the market. We help them with shared working spaces, private offices, infrastructure support, legal support, accounting, and bookkeeping services. Additionally, we provide workshops and courses to develop the skills of the entrepreneurs.

The role of “Badir” program does not only reside in incubating these projects at its headquarters and providing facilities that help entrepreneurs turn their ideas into successful investment projects, but also in contributing to the creation of promising investment opportunities for these companies and helping them launch strategic partnerships with other startups to achieve success in the local market.

“No one can succeed alone; the least help you can have is advice from those who have succeeded before you.”

MENAbytes: What do you think are the biggest challenges faced by Saudi entrepreneurs?

Nawaf: The major challenges faced by Saudi entrepreneurs is local regulations & bureaucracy, access to funding, and access to talent that are mostly due to the ecosystem not yet reaching maturity.

MENAbytes: What do you think has been the biggest success for Badir ICT Incubator until now?

Nawaf: Badir has gone beyond its scope and played a role in developing the national incubation policy, creating angel investment network and filling the gap caused by the misalignment of culture between university and community by creating university entrepreneurship programs. These and many other initiatives were done by Badir to be an enabler in the ecosystem. There are many achievements accomplished by Badir program over the past ten years and most notably is Saudi society’s acceptance of innovation culture and technology incubation as Badir program succeeded in encouraging Saudi youth to innovate.

MENAbytes: What would be your advice to young aspiring entrepreneurs in Saudi & rest of the region?

Nawaf: Know your target segment: by knowing your target segment you can think like them and know what they really need in a product, let them tell you what they need. Plus, by gauging the size of your target segment you will have a better way of evaluating your returns.

Ask those with previous experience: no one can succeed alone; the least help you can have is advice from those who have succeeded before you, and those who have failed. Learn from them and gain an advantage.

Always work on your added value: the market is VERY competitive. Even if your product is revolutionary, someone will step in and compete with you. Your added value is going to be the main driver for customers. This is an ongoing process though, don’t delay anything because it’s not perfect, deliver with what you have and work on improving as you go.

The team is the backbone: your startup is as strong as its team. Make sure you partner with or hire people who believe in creating, building and innovating because your first few years are all about that. Focus on the principles as much as the skills.

Network: networking with people in your industry can open doors for investors and partners both can help elevate your product or service. If you can, utilize booths at events and expos to both acquire and retain customers.

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