Dave as in Dave McClure of 500 dished out a good lesson to the MENA region in his keynote speech yesterday at ArabNet’s Digital Summit in Dubai.
“Local investors whine about entrepreneurs. Usually the real challenge in most markets is that the investors don’t have their act together, the investors don’t take risks and the investors don’t know how to build their own ecosystems.”
As covered by Executive Management’s online publication, writer Livia Murray went on to say:
“…in his keynote, he went on to stress that a successful ecosystem requires early access to capital and early investor optimism.
He points to Estonia as a prime example, where early investors in Skype took a large risk very early. Though investing early does not always garner the same success across the board, McClure cites early optimism as a key factor that breeds trust in an ecosystem.”
A few years ago the Academic Entrepreneur did a study of Dubai Internet City and its efforts towards incubation. In interviewing participants, the same lesson came through. We see this in other regions besides MENA as well. Lots of money on the sidelines, unwilling to take the early risks that building an entrepreneurial ecosystem. The rich folks are just waiting for a big hit or two, and then they’ll jump in, so they say. Not a lot of early optimism now, however. “Sorry, you’ll have to wait”. Many of the talented entrepreneurs leave and go elsewhere. Risk capital attracts them. The move to where it is. Some good entrepreneurs stay, and struggle along. Now and then, one breaks out of the box, but usually by managing to raise a foreign venture capital round after a serendipitous bootstrap.