Business

'Startup Rising' takes a look at e-commerce in the Arab world

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At a moment when the world is transfixed by bloody political dramas unspooling in Egypt and Syria, a book about business start-ups in the Arab world might seem poorly timed.

But many of the same social and technological factors behind the region's unrest — young populations, a fervid embrace of social media — are also driving an intriguing and less-told story of entrepreneurial ferment in the Middle East.

A new book introduces readers to this world of vibrant, mostly digital companies with odd, Anglicized Arabic names that are drawing interest from global technology and venture capital investors.

Written by Christopher Schroeder, the book, "Startup Rising: The Entrepreneurial Revolution Remaking the Middle East," is published by Palgrave Macmillan.

It provides a refreshing break from the hackneyed analyses of the region that reduce its people to crudely drawn cultural cliches while ignoring the other things that motivate young Arabs (like people everywhere) — in this case, the profit motive or the thrill of a great business idea.

Schroeder, an entrepreneur and venture capital investor, argues that some factors make the Middle East prime territory for online businesses.

For one, they can appear and (usually) operate without wasta, the Arabic term for the favors and connections that lubricate and confine public life.

The Web's "flattening" qualities and anonymity have given women, restricted in so many other areas of public life, new opportunities to strike out on their own.

There is also a gritty resourcefulness common to the people who succeed in the Middle East's poorer countries.

Some of the stories here are widely known — though too seldom told — like that of Jordanian Fadi Ghandour, who built Aramex into one of the world's largest logistics companies, or Samih Toukan's Maktoob, the Arab-language Internet portal sold to Yahoo in 2009 for a reported $164 million.

In e-commerce, clever early entrants have flourished by maneuvering around red tape, or tapping into the captive but poorly served market of housebound women, such as retailers Souq.com, MarkaVIP and Namshi.

Another such start-up, Jamalon, was set up in 2010 by Ala' Alsallal, a young Jordanian, with $14,000 and his mother, brothers and sisters as staff. It is now the Middle East's largest online book retailer.

The book's rather clunky title echoes "Start-Up Nation," the bestseller about Israel's high-technology start-ups and the national cultural qualities that nurtured them. It strikes a similar tone and approach, using anecdotes about businesses and entrepreneurs to explain what makes the region a hub of entrepreneurial creativity.

The author's efforts to impose an ordered theoretical framework over the inherently untidy world of new businesses is labored and PowerPointish in parts.

When writing about "great ecosystems," Schroeder says, start-ups need these groups: the investors, the conveners and the recognizers. Too often the tone is relentlessly boosterish and it is worth remembering that the author, a founder and investor, is part of the story.

"Startup Rising" was completed in February of this year, before the optimism around the Arab Spring unraveled entirely in Syria and Egypt.

This matters little to his underlying analysis, and to its credit, the book does not dismiss the huge challenges that business still faces in the region from political risk, heedless regulators and a depressingly dominant state sector.

It also performs a valuable service by shining a light elsewhere. As one mentor of entrepreneurs puts it: "This is the real Arab uprising."

John Reed is the Jerusalem bureau chief of the Financial Times of London, in which this review first appeared.

Copyright © 2014, Los Angeles Times
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