#Egypt’s Young Startups Mount Their Own Revolution

Even if you had planned it, you couldn’t have asked for a better illustration of the Egyptian startup scene. The recent Rise Up Egypt conference here in the capital was held just down the road from Tahrir Square, center of so much of the city’s recent turbulence. On the two days of the conference, the military had taken to the streets. Each of the roads into the square was blocked off by a row of armored vehicles, mounted with heavy machine guns.

So what did the thousand people, mainly young entrepreneurs, attending the conference do? They found ways around the obstacles. If one street was blocked, you tried another one, and another, and another. Eventually, you found a way through. It was slower than the direct route, it was harder, and it took longer, but there was a way. It was a perfect metaphor for startup life in Egypt.

Young Cairenes are redirecting the spirit that was released in the square a few hundred meters away in the Jan. 25, 2011, revolution. “A lot of people who were focused on ways to express their anger [then] are now rechanneling that into other things—entrepreneurship and social projects,” said Ahmed El Alfi, founder and chairman of Sawari Ventures, a Cairo-based venture-capital firm. “They are capturing that newly acquired perception of increased power and abilities as an individual as well as a group, and trying to channel it into things where they may see more tangible returns.”

One such young Cairene, Mai Medhat, now is chief executive officer of event-organizing startup Eventtus but then was working for a bigger company as a software engineer. The revolution that overthrew years of oppression under Hosni Mubarak gave her the courage to quit her job and build her startup.

“January 25th proved to us that we could make a difference,” she said. “We have a powerful tool—our voice—and we can make a difference.”

But if the events of 2011 were the spark that lit the Egyptian startup fire, what difference did the events of this past June 30 make? Crowds returned to the square to demand, and get, the removal of then-President Mohammed Morsi, and that had the military back on the capital’s streets. Did that damp the entrepreneurial flames?

No, said Bassem Fayek, co-founder of education startup SkillAcademy, but it did make life harder. He said his group had to leave its shared space when the June 30 protests erupted, but the staff kept working through Google+, a social network that allows document collaboration. “It was much more challenging,” Mr. Fayek said, “but in a way it has helped us to be more flexible.”

One thing the events of Jan. 25 and June 30 did was realign perspectives. Egyptian bureaucracy can be stifling, said Mr. Fayek, but “we have seen so much happening, the risk we are happy to take is so much bigger. I have been in protests—compared to that, how hard is it to start a company?”

Young people similarly reframed their attitudes toward failure, said Mr. El Alfi. “The great majority of people [in Egypt] will tell you that business failure is a shame,” he said. “However, I tell you that is being dispelled when you see young investment bankers and analysts and the like jumping headfirst into police shields. They are not afraid of failure—[now] they just apply it to something different.”

Some attitudes haven’t changed. Mr. El Alfi said too many Egyptians still see life as a zero-sum game. If an entrepreneur were successful, he said, “everyone else here in Egypt would think that somehow that deprived them of something, that deprived them of foreign-investment dollars.

“We need a cultural change that says we don’t live in a zero-sum world. We live in a world where as we continue to build and where, as we add things to each other, we all get more.”

Likewise, shaking off years of state intervention in every corner of society won’t be easy, said Karim Hussein, a former senior vice president of engineering at U.S.-based WebMD Inc. who now runs D-Kimia Diagnostic Solutions, an Egyptian biotech startup.

“Because we lived under this very strong socialist state, the expectation of the people was that the government would do everything for them,” Mr. Hussein said. “The citizenry expected too much.”

Most of the entrepreneurs and investors were eager to stay clear of Egypt’s bitter, and at times deadly, politics, not because they supported or opposed the government but because they saw it as irrelevant to running their businesses.

“For me, it is noise that you have to ignore and focus on what you do,” said Mr. Fayek, who previously had been closely involved with one of Egypt’s new political parties. “I have seen things at the heart—that is not the right way for me to make a change in my country. It is what we do.”

His was a view shared by Rise Up Egypt’s organizer, Con O’Donnell. “None of [the entrepreneurs] feel that anything is relevant to them. Government is irrelevant, the policy makers are irrelevant. Even the banks are irrelevant.

“If the banks don’t help us get e-commerce, we will find another way to do it. There is always a way round. It may take longer, it is often harder and not as direct, but there is always a way round.”

http://online.wsj.com/news/articles/SB10001424052702303562904579223313655006446

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