Badir Program for Technology Incubators, is one of King Abdulaziz City for Science and Technology’s programs. Badir seeks to build Saudi’s startup ecosystem through developing business incubators, enhancing the concept of technical entrepreneurship and transform projects and technical research into successful business opportunities, and more.
We at Startup MGZN had the pleasure of speaking to the CEO of Badir, Mr. Nawaf Al-Sahhaf where he shared with us some interesting insights about himself and on Saudi Arabia’s startup ecosystem.
Before Badir, Mr. Al-Sahhaf was a senior consultant with the Saudi Industrial Development Fund assisting companies in researching and implementing business opportunities in the construction. What made you shift from the industrial field to working with startups and SMEs?
During my stay with Saudi Industrial Development Fund (SIDF), I came across a lot of local entrepreneurs who wanted to set up their projects but due to lack of funding and guidance, they were not able to. Majority of these entrepreneurs had no history of entrepreneurship in their immediate family that put them at a further disadvantage due to lack of any mentorship. SIDF at that time used to fund only medium & large projects supported by established companies/individuals. To help such individuals, I started doing research on the local entrepreneurship sector and came across a newly launched Business Incubation Program by King Abdulaziz City for Science & Technology (KACST) under the name of Badir. My curiosity about understanding the entrepreneurship ecosystem landed me with a job at Badir as they were on a lookout for professionals with exposure to the local industrial sector.
Mr. Al-Sahhaf became the CEO of Badir in 2013 and has made some changes to the organization. What kind of restructuring was done to make Badir an internationally recognized world-class incubation program?
I took over the leadership role at Badir as CEO five years ago. At that time the organization was at its infancy stages and needed strategic direction to be amongst the best incubators in the world. We started restructuring the organization to strategically position it to become an internationally recognized world-class incubation program and play a major role in improving the effectiveness of the Saudi entrepreneurial and innovation eco-systems. Badir was benchmarked against the best-managed incubator programs in the world. The restructuring was made with the objective to bring in greater business and customer focus that lead to marked improvement in graduations from Incubators. This restructuring also involved geographical expansion to Western & Eastern Regions by opening Incubator Programs in Jeddah, Taif & Dammam. Badir expanded its activities in the local universities where several university entrepreneurship programs were created to prepare future entrepreneurs.
Also under this restructuring, we launched several internal initiatives that included HR initiatives for rationalization of policies and procedures, better employee orientation, structured training and development programs like KPI based evaluation. We launched CEO Open house, a forum for all employees to communicate their ideas and views to the CEO.
How would you describe the startup ecosystem in Saudi Arabia as of yet? How do you think it’ll look like in a few years?
First of all, the entrepreneurial ecosystem in Saudi Arabia has been significantly growing during the past five years, as the government, in addition to other entities, got more involved in supporting the ecosystem. Ten years ago, there were no incubators, no accelerators, no angel investment networks and no proper funding options. Now all these programs have been established in the Kingdom through the participation of Public & Private organizations.
During the next five years, I see the Saudi startup ecosystem succumbing into to the second level where it will be at par with the developed world, and local entrepreneurs will have access to global markets.
What steps are currently being taken by the government and the private sector to further support startups in Saudi Arabia? What other steps should be taken?
In recent years, the Government of Saudi Arabia has been taking proactive steps to build a strong infrastructure for the Saudi entrepreneurship scene and played a vital role in encouraging innovation and fostering entrepreneurship among Saudis.
The number of startup supporting organizations, accelerators, incubators, funds, etc. – has increased significantly in Saudi Arabia over the last few years. These organizations and companies are ensuring funding, incubation, training, coaching, mentoring and access to the market.
The Saudi government has devoted significant resources and implemented a range of initiatives to boost the growth of startups and there are currently lots of government and non-profit organizations that are directly or indirectly supporting the Saudi entrepreneurs. The country has over 40 business incubators and several accelerator programs, 50 percent of which approximately have some form of government affiliation.
Today, we see great potential in supporting the Saudi entrepreneurs, with the increase of government initiatives and entrepreneurship support organizations. However, the Saudi entrepreneurs are still facing various challenges when starting up such as: regulations and bureaucracy, access to funding, and attraction of top talents to the area.
To sum up, there are clear signs that the Government is heading towards the right direction to address these challenges but there is still a long way for the KSA in entrepreneurship and to make Saudi startups more visible and appealing to venture capitalists all over the world.
Any success stories with startups that were incubated and/or funded by the Badir program?
There’s an increasing number of successful startup stories, for example;
In ICT, we have MORNI, which revolutionized the road-side assistance experience for vehicle owners. Today it is the largest roadside assistance company in the region with over 8000 providers. In 25 months, it grew from two co-founders to over 40 employees. There is also Quant which achieved amazing strides in data analysis and actuary sciences, selling their advanced software to companies to organize and assess big data.
Another success startups include Foodics Company that provides a cloud-based iPad POS Solution for complete restaurant management. Their system is being used by over 350 brands in Saudi Arabia, UAE, Turkey and Egypt. The company currently employs 52 employees. Foodics recently closed a SAR 15 million ($4 million) investment round, led by Raed Ventures and Riyad Taqnia Fund (RTF) with the participation of Neseel Holding and 500 Startups Fund.
When we look at other fields like Biotechnology, Diabetic Science International is a company incubated at Badir biotechnology incubator, where the company has successfully developed a bandage lined with a substance extracted from shrimp shells that have natural healing properties beneficial especially for diabetics. This product is now on the verge of industrial-level production. Another startup at our Bio-Incubator is “Brewdan” who has successfully developed a safe and healthy energy drink that is made from the Hibiscus plant. Brewdan plans to enter the market during the first quarter of 2018.
Why is a startup ecosystem important in Saudi Arabia? What impact does it have on the community and the region?
A strong and sustainable startup ecosystem is considered to be a key economic driver for any country to remain competitive in the global landscape. Dynamic startup ecosystems breed new startups that create new jobs and attract talents and investments.
A startup ecosystem is formed by talents, startups in their various stages, and different types of public and private organizations and NGOs, that interact as an organic system to create new innovative companies. The different organizations focus on various parts of the ecosystem function, business vertical and/or startups through their specific development phases. The government, higher education, financial organizations and big companies are the cornerstone organizations in developing startup ecosystems.
Lastly, a policymaker should engage stakeholders to understand their needs and incorporate them into the policy-making process. The same applies to investors and other players in the ecosystem. By working together, all these stakeholders can build a strong and trustworthy ecosystem for everyone.
An advice Mr. Al-Sahhaf would give to aspiring entrepreneurs?
Know your target segment: by knowing your target segment you can think like them and know what they really need in a product, let them tell you what they need. Plus, by gauging the size of your target segment you will have a better way of evaluating your returns.
Ask those with previous experience: no one can succeed alone; the least help you can have is advice from those who have succeeded before you, and those who have failed. Learn from them and gain an advantage.
Always work on your added value: the market is VERY competitive. Even if your product is revolutionary, someone will step in and compete with you. Your added value is going to be the main driver for customers. This is an ongoing process though, don’t delay anything because it’s not perfect, deliver with what you have and work on improving as you go.
The team is the backbone: your startup is as strong as its team. Make sure you partner with or hire people who believe in creating, building and innovating because your first few years are all about that. Focus on the principles as much as the skills.
Network: networking with people in your industry can open doors for investors and partners both can help elevate your product or service. If you can, utilize booths at events and expos to both acquire and retain customers.