When Stacy Waite moved to Abu Dhabi last year, the opportunities for a budding entrepreneur seemed to jump from every corner of the growing city. Experienced in working with digital media start-ups back home in the US, Ms Waite, 49, who arrived in Abu Dhabi from Los Angeles, saw a market whose surface was yet to be scratched by online businesses. Why not launch a multilingual online training portal for hospitality workers, she wondered, or a site covering the elderly care market?
"It has been a huge learning curve," she said. "What I have learnt is that there are so many opportunities here - but this is not an easy place to start a business." Ms Waite is no stranger to launching an original enterprise. When she was 19, and studying communications at the University of Albany in New York State, she started a travel business focusing on ski trips, using the student body as her first clients. In 1989, she became, at 28, the youngest woman ever to launch a hedge fund on Wall Street.
But her Abu Dhabi venture has presented a unique challenge. And to meet her goals, she's starting a networking group for digital entrepreneurs in the capital. She has found, like aspiring entrepreneurs across the country, that the reality of building a new company from scratch in the UAE is often more complicated than the nation's pro-business image suggests. But that has done nothing to quash her enthusiasm about the potential for launching successful businesses the Emirates.
"The big thing is learning from people who have been there. What's missing here is people getting involved and solving the problems - get the issues on the table and work out how to deal with them," she said. "We just have to learn about how people are solving the problems." Starting your own company in the midst of an economic crisis may seem, on the face of it, like a bad idea. Lenders are cautious, businesses conservative and consumers are on the defensive.
But the opposite argument is just as compelling, and Ms Waite and others have grasped this fact. During an economic slowdown, big businesses are easily scared, scaling back on expansion, research and even cutting staff. Office rents fall, along with the costs of business services and salaries. Each of these presents an opportunity for an entrepreneur with a big idea. Researchers refer to these conflicting scenarios as the "recession push" and the "prosperity pull". During good times, there's evidence that abundant capital, corporate optimism and an appetite for risk "pull" people toward entrepreneurship. During recessions, slow economies and a dearth of good opportunities in the corporate sector "push" the most talented to the same place.
In the Middle East, the anecdotal evidence shows that, since the emergence of the global economic crisis more than two years ago, the importance of small companies and creative entrepreneurs has increased in parallel with the declining fortunes of the property and finance sectors. And along with that anecdotal evidence, the reality is that there are organisations and funds that exist to support businesses in their infancy. Most business advisers, however, tell clients their first step should be to carefully consider how much they are willing to personally invest in a venture. "The number one thing that I want to see from an entrepreneur is some skin in the game," said Feroz Sanaulla, the regional director of the venture fund Intel Capital. "If you're not personally invested in what you are doing, don't come to me saying 'here's my idea, give me money and I'll do it.'"
One mainstay of the entrepreneurship scene are the angel investors, so named because they take companies under their wing from an early age, providing the financing needed to let an entrepreneur focus solely on the task at hand (allowing them to quit their day job, in other words). Just as important, angels specialise in mentoring and coaching the entrepreneur, and connecting them and their companies with potential partners, suppliers and customers. Angel investors are in short supply in the Gulf, but one valuable resource to consider is the Arab Business Angels Network (Aban), a Dubai-based organisation of successful entrepreneurs and business people who help small enterprises get on their feet. Michael Matly, a 28-year-old American doctor who co-founded Hayati Healthcare - a UAE-based financing company that offers patients medical loans for procedures not covered by their insurance plans - is an Aban success story. The organisation gave him Dh500,000 in start-up capital, and since its launch in March 2009 Hayati Healthcare has formed partnerships with 70 clinics and hospitals in the UAE. Last year, it was named the best new company in the Middle East by the MIT Arab Business Plan Awards, besting 1,199 competitors. "At the time, there was a real funding gap in the market for companies that needed early-stage money. Arab Business Angels Network was one of the first companies to provide us with seed capital," Mr Matly said. And while start-up capital is vital, the young businessman warns would-be entrepreneurs to not neglect the future. "We've been lucky because we've had a lot of growth and made a lot of money, but for some companies half a million dirhams will allow them only to break even." For this reason, Mr Matly urges entrepreneurs to line up strategic investors for capital needs crucial to daily operations. As well as receiving funding from Aban, Hayati secured financing from Gulf Finance, which underwrote their loan and served as the firm's business advisers. "There are a lot of upfront costs in terms of the office, and you have to pay a fee to set up the company. When you're a young start-up that's very costly if you haven't started making money yet," he said. Another organisation you may want to consider is Envestors, which matches entrepreneurs with potential angel investors. The company, which was established in Dubai in 2008, works with more than 1,000 angels, and also offers services such as business-plan preparation, mentoring and coaching. David Moleshead, co-founder of Envestors and himself an angel, said it's a good time for entrepreneurs to start a business, as people like him are looking for good opportunities. "There's a lot of people here who are interested in putting a stake in good businesses. Considering what has happened in markets in the last 18 to 24 months, I think people see the value in real businesses as opposed to investing funds or equities outside the region," he said. Business incubators are also a good place to find early-stage support for your idea. The incubator model typically combines a physical proposition - inexpensive office space with shared secretarial and administrative services - with more intangible systems of support, like networking events, training sessions and coaching and advice. Dubai's Entrepreneur Business Village is the UAE's newest incubator, and was launched by the emirate's ruler, Sheikh Mohammed bin Rashid, last year. The office park, located near Dubai Creek, offers discounted rents and a host of support services to small companies. A portion of twofour54, Abu Dhabi's media free zone, is devoted to incubating small companies, although it has a tight focus on businesses developing Arabic-language media content. Another notable business incubator is Intilaq, a service launched last year by Bayt.com, one of the UAE's most successful online start-ups. Bayt now has hundreds of employees spread out across more than a dozen offices in the region, and is earning healthy profits from its online job advertising service. Intilaq helps new companies - with a focus on web start-ups - establish themselves, offering a combination of funding, advice and access to Bayt's offices and staff in Dubai. When it comes to starting your own business, Dan Stuart, a Bayt alumni, may have a better perspective than most. He recently gave up his job as the director of Intilaq to test the waters of entrepreneurship with a new online venture, GoNabit. The company is a social media-based start-up that will send interested users special offers for restaurants, concerts and assorted services. It will be launched in Dubai later this year, but Mr Stuart hopes to go international if all goes well. Mr Stuart may have an advantage over other entrepreneurs for a keen eye for what works in business and what doesn't, but it doesn't mean that his new venture isn't fraught with risks. "People are used to starting their business with $160 (Dh587.2) licence fee and a name-search check to set up a company," he said. "Entrepreneurs are actually encouraged to incorporate, but here people are less likely to do so. You can't just go online, fill out a form and put in your credit card. Here you either need to find a local partner or move into a free zone, both of which are quite expensive." Given his experience, Mr Stuart has decided to formally incorporate his new company in the Cayman Islands and create a holding company that will be based in Dubai, mainly to save on administrative costs. Asked about what he tells fellow entrepreneurs or individuals asking his advice on getting started, his reply is simple: "I had a lot of people come to me [at Intilaq] that accounted for a salary in their business plans. But to make a business work, you need to put your own money into it first and watch it grow." Another source of both funding and support that cannot be ignored are the various emirate-level funds that exist solely to foster entrepreneurship. Each emirate has a fund - a modern version of a historic system of royal support for merchants - that will provide money and advice to UAE nationals looking to start a business. Named after the respective rulers of each emirate, these funds are some of the best-capitalised venture investors in the Middle East. And of course, the wise entrepreneur always seeks advice from a business coach or consultant. Rawan Albina, a 34-year-old Lebanese expatriate who started her own business two years ago, offers coaching and mentoring services to women entrepreneurs. Having gone through a difficult process herself to establish her business, called Leap Consultancy, in Dubai, Ms Albina understands the challenges and faced by her clients. "I realised there are a lot of women entrepreneurs out there who are going through the same learning curve and the same journey as me who really needed coaching around their work-life balance, around why they are in their business and what their business is about," Ms Albina said. "Some of them give up when they face obstacles. Especially when you're alone, it's important to have someone as a sounding board," she added. When Ms Albina was in the process of setting up her business, she faced several vexing, common obstacles. She couldn't afford to pay for a license and an office space in Dubai, which as an expatriate she was obligated to pay for, so she instead paid Dh30,000 for a license through the Ras al Khaimah Free Trade Zone. She borrowed her start-up funding, Dh100,000, from a friend. Ms Albina said that it's important for entrepreneurs do their homework before they start their business. In addition, they should seek out networking groups for support and advice. Above all, she says, there is no such thing as a "wrong" question. In many cases, the best friends a start-up company can have are other start-up companies, especially those that have made it past the fragile early stages and are in growth mode. The lessons learnt at such businesses are often invaluable, and their founders are typically highly supportive of new entrepreneurs. Finally, a number of support networks exist to connect and support owners, among them YallaStartup, which was founded by Arab entrepreneurs. YallaStartup is a web-based support forum for those who are thinking about launching businesses. The founders of YallaStartup have convinced a number of successful Arab entrepreneurs to offer their advice and answer questions through the site, and this year the organisers plan on holding offline networking events as well. TiE Global, one of the world's best known networking organisations for entrepreneurs, has a lively local chapter in Dubai, which hosts regular meetings and events for its members. And Dubai Sillicon Oasis, one of the emirate's technology-focused free zones, has also begun hosting regular meet-up events for aspiring young technology entrepreneurs. But for Ms Waite, networking groups and incubators aren't the only solution. In this tough financial climate, talk is often cheap. "You can network until you're blue in the face," she says. "But you won't make changes and solve problems. People with similar interests and business smarts need to start working together more. The solitary, smaller entrepreneur won't do well here. That's the reality." firstname.lastname@example.org * With additional reporting by Sanam Islam, David George-Cosh and Jeffrey Todd