Once upon a nascent ecosystem, the entrepreneurial minds in Lebanon were many but funders were few and support systems, such as incubators and accelerators, as rare as an honest politician. Then came the central bank’s Circular 331 and a splurge in venture funds and acceleration programs – many of which have vanished or been forced to retrench with the cessation of bank-fueled entrepreneurship initiatives. To interact with an example for an acceleration entity of the post-331 age, Executive sat down with David Munir Nabti, chief executive officer of new growth accelerator, Bloom.
You run a new acceleration program called Bloom and have been something of a fixture in the ecosystem for the past decade at least. However, it seems you are like an entrepreneurship nomad who carries his office on his shoulder and is not operating from a physical office. Why did you make this choice and what are your aims beyond having no physical head office?
I like finding healthy and inspiring environments (shows images of working in outdoor locations). But I also like connecting with different people. We like organizing discussions and hosting events in different places, and I’d love to do more of that.
So despite operating in the virtual space, you are aiming for more events where people attend in person?
Yeah. The way in which we have been doing things in different phases over the last 13, 14 years, has been that we have been creating co-working spaces and then worked from co-working spaces and community spaces. We worked from here at [Beirut Digital District] BDD for a long time, and we worked from antwork for a while. All of these places are great and we need a lot more of them. In our role, though, we shifted to being online. We are now working with different groups and accelerators in Lebanon and in the region. We are now working with accelerators in seven countries, and we want to help them to do more stuff to leverage the online world […] but the physical community spaces are still super important. So ideally from our side at Bloom, we can work with dozens or hundreds of different community spaces in programs around the region and help them.
You say ‘we as Bloom”. What is this new brand and what is its heritage?
In the previous versions, where we were working in physical spaces, we had launched AltCity [in 2011] and prior to that there even was [a venture called] Rootspace. The idea for [the AltCity] launch really was that we wanted to see how we can create an alternative approach to a city, a version that we dream […] it was somehow utopian but also very practical in that we were living in it and making it real. It went very well, although we launched AltCity just around the same time as the crisis in Syria started really getting worse.
How is your view on how much the future of acceleration and entrepreneurship will be online only, or how much will be happening in hybrid online and physical collaborations, and how much will be face-to-face training and discussion events?
I think there will be a lot more online only but I agree that the highest quality experiences will continue to be a hybrid mix.
Was your decision to move into online from the previous AltCity model triggered by the pandemic?
No. We shifted to that [model] about three and a half years ago, well before the pandemic. The model of AltCity originally was that we wanted to bring some of the benefits of innovation parks or incubation spaces in some way and combine this with the model of something like Starbucks. The idea was for a co-working cafe and literally to have 30, 40, [or] 50 of them around Lebanon. This was the original idea… but for whatever reason, it did not work here. We were running multiple businesses on a string line staff, on too small a budget, [and] the economics did not work quite out. It was exhausting and we were not having the impact that we wanted to have. So we and the team asked ourselves what things are going well and what things are not going well, and we changed the model. That is when we started shifting to the programmatic model, moving from a spatial office to a program office, and then we started to think a few years later if we could go fully online and do things more efficiently.
This is how we shifted to running online programs but also programs for programs. So we are still running accelerator programs but we are working more with other accelerators and other programs that offer education experiences. We have the tools and methods to help them run more effectively. We have ambitious goals. Our goal is that in the next two years, we want to graduate around 10,000 people from our programs. This can only work through a combination of three methods. One is direct programs that are supporting enterprises, [the second] is working with accelerators. It is sort of a community experience where we all learn from each other. The third is through the tools and software that we are building, which is the Bloom technology side.
Is this software something that you develop and provide as software as services (SaaS) model?
Yes, we are building it as a SaaS model. We are using some aspects of it internally now, and we will be rolling out the private data side in the next three to four months. Hopefully by [the third quarter] of this year, we will be expanding data users and soon after launching more publicly.
How would you compare your operation at the time of AltCity with the online operation of Bloom?
There are pluses and minuses of both environments. There are pluses to being in a physical space together. One [plus] is giving the people a more dedicated space to focus and also there are aspects to people being in a room together to brainstorm. There are things that are being helped by being in a physical space versus an online space, and I think the more valuable relate to serendipity, it is the random connections [that are created] as people go to the coffee machines to get coffee, or go having lunch together, bump into each other from different project teams and share some ideas. Those things are really powerful, not just for a team but for an ecosystem. These are things that we are working to address in the online environment. We have created for example casual team lunches [online] where people get together and chat about different topics, and we are seeking to have more balance between focus times and casual interaction time.
There are also benefits of the online space. Physical spaces can first of all be incredible distracting, and there are reports asking how many hours in an 8 or 9 hour workday people are actually doing work. There are studies showing that open plan offices are distracting for people doing team work. And it is team focused work that is actually most effective. We are trying to find ways that can help team members to focus their time and be able to engage the right people wherever they are.
You say you aim for 10,000 graduates from the various entrepreneurship and acceleration programs. What would have been the maximum number of graduates that you could have dreamed of under the AltCity model?
When we were running the early stage programs a few years ago [at AltCity], they were in person. We were running one pre-accelerator and two accelerators, working with around 20 teams per year [in the accelerators] and with around 60 teams in the pre-accelerator. About 100 were going through an early training program. When we shifted to online we did not just change [from having a focus on greater Beirut] to have people from other countries, but [added] the two different models that we are trying to expand on.
It sounds like you are in the process of multiplying your impact through distributed partners, almost like a franchise restaurant.
It is through this aspect of communities of practice that you also want to help building effective communities of learning specifically in the acceleration space?
This is part of our programs and we are working to build it into the software which focuses on the three pillars, which, by what we have seen in the world of entrepreneurship acceleration, is a new approach. One [pillar] is wellbeing and engagement, the second is focused on universal skills, and the third is focused on organizational development.
How many people are in the team of Bloom? How many of them are developing the software suite?
Our team is in six countries now, and we are running programs in eight countries. In Lebanon, Jordan, Palestine, Egypt, Tunisia, Algeria, [and] Morocco, plus we are working with a group of Iraqis that are in Turkey. Our team is in Lebanon, Egypt, again some Iraqis based in Turkey, France, Holland, the UK, and Qatar. We have 16 full time and another five part time, as consultants and stuff like that. There are about a third that are just focused on the programs, a third focused on the software side, and a third supporting both sides.
How much of your team is in Lebanon and how much of your total operational activity is centered in Lebanon at this point?
It probably is about half-half [in terms of team location], but we do have some people who go back and forth, spending some time here and some abroad. In terms of our operations, and the teams we are supporting [in Lebanon and in other countries], it is also about half-half, except that we have different roles in these two programs. For the program that is in Lebanon with the 50 enterprises, we are the main group managing [it] and managing the deployment of funds, etc. In the program where we are supporting groups in seven countries, we are leading the implementation of the training of the accelerators, the metrics and a lot of those activities, but are not dealing with the deployment of funds.
And where are you incorporated?
We are incorporated as a non-profit here in Lebanon and also exploring how to best incorporate outside of Lebanon. We are going to be incorporating both as a social enterprise and as a non-profit outside of Lebanon. We do have a sort of non-profit fiscal sponsorship arrangement in the US.
Does that mean you want to migrate from a non-profit to a for-profit but social enterprise state of existence?
I think we will always have both the non-profit and the social enterprise approach. We definitely want to make the social enterprise self-sustaining and hopefully profitable, so can we can be expanding our R&D, our tools, run more programs, and be more effective. That would enable a lot of benefits that are somewhere between much more difficult and impossible [to achieve] with a non-profit approach. We will always have a very strong focus on trying to reduce inequality. This is our core driving value.
It seems to be a challenge right now to pay people outside of Lebanon who are working with a Lebanese entity. How do you handle this?
We are very lucky that our funding is primarily from outside of Lebanon and for different projects. Thus we have fresh funds that are not in Lebanese [pounds].
And you circle them through Lebanon?
For the most parts. We are trying to see how we can be hiring more both for our team and for enterprises [in our programs]. We have two programs that touch on Lebanon but one is fully focused on Lebanon. It is working to support 50 enterprises through eight accelerator cycles over the coming year. We are going to see how we can help them grow outside of Lebanon, but be growing their teams inside of Lebanon.
Did the liquidity crisis of 2019 have a very severe impact on you?
It did not change our model very much. Of course it did change our operations, the way we deal with aspects of currency exchange, transfers and funds, etc. We also did lose some funds that got locked.
However, the challenges presented by [the economic collapse were ones that] I was fearful of for many years prior.
Is it correct that you had a seed funding that came from outside under a non-profit paradigm?
We had pilot funding from several different sources, all of which has been either from outside of Lebanon or personal funding. We as co-founders have put in a substantial amount of our personal funds and of course a lot of uncompensated time and opportunity cost. But we had some seed funding to help with development.
When you say co-founders, this is you and who?
For the different elements over the years, there have been different co-founders. For the Bloom platform it is this gentleman Bilal Ghalib and myself. He is Iraqi American and also lived in Lebanon for a number of years.
Through the Bloom acceleration program, are you taking equity in any of the companies that you are accelerating?
We are not taking equity. There is grant funding that is supporting the program [of accelerating accelerators] and grant funding that is supporting the companies.
Some previously prominent acceleration programs have taken equity in the hosted companies, channeled foreign or local investments, or focused on grants. Do you see one of these methods as preferable?
I think all of these forms of finance are needed and we are running programs in all of these different flavors, equity based, grant-based, and even fee-based programs. These all are helpful and we need more of them in Lebanon and in the region. We need to give more options to startups for them to decide what is most appropriate [in response to] what they are looking for.
You as Bloom do not operate with an own investment fund, right?
We do not have a private fund. It is something that we have spoken about previously and would be happy to explore with people but part of [not having done so] is because there are only so many hours in a day.
Are any startups in your program ready for demo days, or do you sense any tech companies emerging from the underbrush that would by local standards be unicorns?
The program that we are running in Lebanon is focused on existing companies, not early stage startups. These are companies that have already had some traction and we will have a very exciting demo day in a couple of months. The venture capital world often looks for unicorns but strong economies are not usually made of unicorns. They are made from a lot of good SMEs. From this aspect, our objective was not to find unicorns, but to focus on sustainable job creation inside of Lebanon. Some of the companies are definitely investible and have mobilized investments but our focus really was on which groups can be sustainable creators of more jobs in Lebanon. Inclusive jobs.