In praise of chaos

Entrepreneurs are using Lebanon’s lack of formal structures to their advantage

The beauty of chaos

What happens when you combine a few crazy startups, visionary ideas and some equally crazy support institutions? In a word, magic. In a country where deep sectarian divisions, a moribund economy, poor security, weak institutions and staggering debt have produced a chorus of naysayers, several plucky startups are showing us how to build a successful ecosystem of enterprises. Their model is to have no model: there is no top-down, structured system, rather a volatile, ever changing concoction of those with ideas and those with means. Chaotic, perhaps, but the verdict is in: it’s working.

Entrepreneurs emerging from this four year old ecosystem are starting to show results. Startups from the 2013 Executive Top 20 have gone on to raise subsequent series of funding and open offices regionally or globally. There has even been a partial acquisition. As this year’s Top 20 list shows, Lebanese entrepreneurs have not only been able to come out with solid business models, but have also developed new technologies and won coveted patents.

In every way, the ecosystem has evolved in the past four years. The sheer number of startups has increased — though the exact number is unknown and estimates range wildly — as did quality and sophistication. This year was a testament to this evolution as a handful of startups were accepted to large international accelerators. Meanwhile, entrepreneurship support institutions have boomed, new venture capital firms have moved in and novel financial schemes have kicked off. All in all, the resources are improving and startups have something to show for it. Successful entrepreneurs that started around 2009 and whose companies have grown considerably since then — such as Anghami, FOO and Green Studios — are contributing back to the ecosystem as mentors and angel investors. While Lebanon has not yet witnessed a billion dollar exit, the country has seen foreign investors’ interest in a local company: French company Webedia acquired a majority stake in Diwanee this year. In short, the situation continues to improve for our entrepreneurs.

But in terms of a successful formula, it is safe to say the country does not have one. Thus far, no top-down initiative or plan by, say, the government has gained traction. Instead, all have been bottom-up. And importantly, this no-model model has produced results. In the chaos and incoherence, the entrepreneurial ecosystem has proven that it can flourish. And stakeholders should continue to push forward in their respective roles: to build companies, to mentor, to coach, to fund, keeping in mind that no execution is perfect, there are always ways to improve and it is necessary to fail.

On the other side, there have been many proposals, plans and white papers of the mission impossible type — such as reinventing Silicon Valley here in Lebanon or running fiber optics — that just won’t happen, either because they are unrealistic or because they depend on outside factors. Abdel Moneim Youssef, whose signature any fiber optic cable relies on, hasn’t budged for years, and expecting him to would be fanciful. Entrepreneurs must accept these facts. And while every organization should have a strategy and mandate, they need to carry on even if white paper plans are not met.

The fact that so many plans have gone awry perhaps indicates that many have skewed expectations. Let’s make it clear: Lebanon will never be Silicon Valley. It’s not going to happen. Not in the sense that Lebanon can’t be a great tech destination, but that it will never be able to perfectly mimic the particular political, economic and social factors that contributed to making the San Francisco Bay Area what it is today.

But we shouldn’t try to be Silicon Valley, either. There is a much stronger argument to be made for Lebanon to find its own competitive advantage than for the country to copy-paste an outside model. We don’t just need a tech hub, but a fully fledged entrepreneurial ecosystem that makes sense for our economy. There is huge, unexploited potential to foster strong agriculture and artisanal sectors, for example. The current ecosystem has perhaps disproportionately focused on tech: so why not take what we’ve learned and apply it to other sectors?

Expanding the burgeoning and successful startup ecosystem to new frontiers is the best — and only proven — way to create growing, sustainable enterprise in the country. Entrepreneurs’ no-model model may be hectic and at times surprising, but it is the first model that not only accommodates but thrives on Lebanon’s no-system system. Let the chaos continue.

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