Tag Archives: ecosystem

Understanding Startup Ecosystems

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understand ecosystemEntrepreneurs require the proper startup ecosystem to nurture and thrive. The recent growth of the Lebanese startup ecosystem is incredibly exciting and has been extremely evident in 2015, as is distinct in the collaborations amongst entrepreneurs, support organizations, and investors.

A startup ecosystem is formed by several components interacting as a system to create and sustain startup companies. A successful startup ecosystem is highly developed in all areas of the components. For ecosystems to become a self-sustaining source of innovation, lead to economic growth, and create jobs, it needs to have the following 6 pillars:

  1. Human Capital
    These are the individuals starting, joining, and guiding startup companies. It’s vital to have access to a good quantity of high-quality workers with exceptional skills and competencies. These qualities include but are not restricted to the level of education, the number of graduates, the fields of specialization, and the level of professional expertise. If entrepreneurs are considering global expansion, then English communication is an important skill they would need to have, since it is the global language for international business.
  1. Knowledge Resources
    Having knowledge resources dedicated to a startup ecosystem is a fundamental success factor. It is essential to increase the knowledge generated and distributed within the ecosystem. Universities, innovation labs, and mentoring and network programs all push startup ecosystems to thrive.
  1. Capital
    A fundamental pillar of a successful startup ecosystem is its accessibility to funding opportunities. Funding sources may vary from venture capital firms, loans, angel investors, grants, and accelerator programs to the 3 F’s (friends, family and fools). Choosing the wrong funding source may be detrimental to a startup’s growth therefore founders must be very diligent when raising capital for their company. When evaluating this pillar we don’t only examine the amount of available funding as lump sum but we also examine how it is spread over the different startup growth stages. A successful ecosystem is one where a promising startup at any stage of growth can raise intelligent money.
  1. Governance
    Governmental regulations and policies can make or break a startup ecosystem. Having laws and regulations that support businesses being created, as well as the investors that fund them, move ecosystems in massive strides.
  2. Infrastructure
    Startups require access to affordable office space/ co-working spaces, high-speed internet, mobile, and utilities amongst other requirements. The lack of infrastructure may be detrimental to forming a successful startup ecosystem. Incubators and accelerators tend to provide some, if not all of these needs to prospective startups. Moreover, the city’s actual infrastructure, such as transportation and good standards of living, is a crucial factors to striving startups.
  1. Markets and networks
    Finally, markets and networks refer to the local market size and its dynamism, in addition to having access to other considerable-sized markets. The market needs to be large enough to sustain the startup’s business and if it’s not growing enough, it could turn away investors and entrepreneurs.

Taking into consideration all the 6 pillars, Lebanon may not have a highly developed startup ecosystem; however, there really is no startup ecosystem in the world that is perfect. We have observed several positive signs indicating that the Lebanese startup ecosystem is headed in the right direction.

The Rise in Lebanon’s Startup Ecosystem in 2015

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Recognizing the importance of remodeling the country’s economy into a knowledge-based one, Banque du Liban’s (BDL) aims to provide funding and support for startups. BDL’s monumental initiative, BDL Circular 331, has played a substantial role in instigating Lebanon’s start up ecosystem, which has been thriving since BDL Accelerate 2014. The momentum has been evident across all stages of the start up ecosystem with the rise of more start up companies, dedicated investors, accelerators, enablers, and more.

During 2015, due to BDL’s initiative, BDL Circular 331, we have witnessed the rise of 3 new VC firms: Leap Ventures, Y Ventures, and Saned Ventures who aim to nurture early stage startups. Also attributed to BDL Circular 331, 6 new funds were established and larger funds than the previous years have been created. For instance, Berytech and MEVP have each created a $50 million venture capital fund, whilst Leap Ventures introduced a $71 million venture capital fund, in addition to other funds that have been springing.

At BDL Accelerate 2014, former UK Ambassador, Tom Fletcher, announced the launch of a new accelerator, UK-Lebanon Tech Hub, which has since been operating. Flat6Labs announce that they will be establishing a startup accelerator in Lebanon aiming to accelerate 100 budding startup companies within the next 5 years. Speed, also a startup accelerator, has started accepting applications for its first round.

We also observed the emergence of co-working spaces, innovation labs, and entrepreneurship programs providing the infrastructure for creative new ideas to flourish and develop into successful new businesses: AltCity’s Startup Bootcamp will accelerate 100 start ups per year; Le Wagon, a 9-week coding bootcamp; Fab lab, a digital fabrication laboratory that also offers workshops and research support.

Additionally, 2 institutions have been founded to create links with other startup ecosystems: UK-Lebanon Tech Hub and Startup Megaphone. UKLTH creates bridges between the local startups and the ecosystem in London. Startup Megaphone organizes international events and activities in key cities to showcase startups, investors and support institutions from Lebanon.

The Start Up event series was launched with a boom in The Plaza in New York City earlier this year; it was followed by another event in Singapore during the F1 Grand Prix. Both events brought together Lebanese entrepreneurs and investors from around the world with high profile start up ecosystem stakeholders. The interactions resulted in knowledge exchange, relationship building and partnership formation.

There have been two success stories recently that prove that it is possible to found your startup, scale it and eventually exit in Lebanon. Japan’s Cookpad acquired local startup, Shahiya, who had originally accepted a $500,000 funding from MEVP, for a reported $13.5 million. The other exit was to a French company, when Webedia acquired the digital media company, Diwanee.

Rasheed El Tayeb, Vice President at Booz Allen Hamilton added, “I believe that the next Alibaba or Google will come from the Middle East. Consumption of digital content per capita is among the highest in the world in parts of the MENA region. As our youngsters move from being tech savvy consumers to becoming producers, tech companies will increasingly emerge from this region.”

As seen in other emerging ecosystems, successful startups tend to give rise to multiple additional successful startups reinforcing the growth of the ecosystem. The Lebanese startup ecosystem has only started emerging and its future looks bright especially with the increase in amount of funding from $50 million to $200 million within one year.

What to expect at BDL Accelerate 2015

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The theme for BDL Accelerate 2015 being “Emerging Startup Ecosystems,” Lebanon’s 2nd international startup conference will be bringing together influential stakeholders from startup ecosystems from 9 key cities – London, Istanbul, New York, Tehran, Berlin, Cairo, Singapore, Madrid, and Beirut. An exceptional set of startups, venture capitalists, accelerators, policy makers, and more will represent the 9 ecosystems that will each have its own pavilion to showcase its institutions.

There will be 2 stages at the conference, one of which will be dedicated to panels, keynotes, and fireside chats as a space for 100 influential speakers from over 30 countries to share their best practices, discuss the challenges they faced during the developing stages of their ecosystems, and exchange their knowledge. The aim of the valuable engagement and knowledge shared on this stage will be a great stepping stone for the Lebanese ecosystem to thrive through learning from the trials and errors of other ecosystems.

The second stage will be dedicated to the startup pitches as part of the two competitions BDL Accelerate 2015 is hosting dedicated for idea stage startups and early stage startups. The aim of these competitions is to educate and provide tools to aspiring entrepreneurs and to assist them in succeeding, as well as to find the best startup in the local scene.

Applications for the Idea Stage Startup Competition are currently open until (updated) November 1. Once teams are selected, successful applicants will be notified to partake in a series of weekly workshops over the span of 5 weeks, around the “Reimagine Lebanon” theme. The workshops are offered by SETT, a think tank focused on enabling emerging startup ecosystems, empowering youth with the entrepreneurial skills to develop solutions for a better Lebanon. The participating teams will pitch their ideas to a panel of judges in front of an audience during Banque du Liban Accelerate 2015 for the chance to win 5,000 USD. To be eligible, one may be of any age and background with the will to learn new methods of thought and passionately wants to create an impact in their community.

The 2nd competition, the Early Stage Startup Competition, features a pitch competition for early stage startups. The deadline for applying for this competition is November 9th, from which the selected startups will pitch at Banque du Liban Accelerate 2015 for a chance to win 10,000 USD in cash, and the opportunity to win a trip to a top tier international startup competition.

Emerging Startup Ecosystems

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Under the leadership of Banque du Liban (BDL) and following the successful BDL Accelerate 2014, entrepreneurship in Lebanon has been taking off, the ecosystem has been taking shape, success stories have been popping up, and dedicated accelerators and investors have been active.

Under the theme “Emerging Startup Ecosystems,” this year’s conference, BDL Accelerate 2015, aims to bring influential stakeholders from startup ecosystems from around the globe to share their best practices, discuss the challenges they faced during the developing stages of their ecosystems, and exchange their knowledge. For an early stage ecosystem such as Lebanon, such valuable engagement and knowledge are essential to educate and inspire attendees to learn from the trials and errors of other ecosystems.

There are diverse perspectives to what contributes to the development of ecosystems and to what factors could lead to its stagnation. BDL Accelerate 2015’s mission is to build a sustainable and vibrant entrepreneurial ecosystem in Lebanon through the education of the thriving Lebanese ecosystem by bringing together exceptional entrepreneurs, investors, and support institutions from 9 key cities – London, Istanbul, New York, Tehran, Berlin, Cairo, Singapore, Madrid, and Beirut to share, inspire, network, connect, learn, exhibit, fundraise and do business at BDL Accelerate 2015.