Middle East: Innovation For The Grass Roots

This article was published in Knowledge@Wharton on July 2, 2015

Earlier this year, I had the pleasure of traveling in the UAE to visit family. I happened to also have the opportunity to delve into the nature of entrepreneurship, especially the work of women entrepreneurs in the region. I had the chance to meet and talk to a series of startup founders, and below is an article about one of the innovators I met while there.

There tends to be a rather uni-dimensional view of women in the Arab peninsula. It’s not quite one of a hard-charging innovator and business leader. However, that’s certainly a dimension that needs to be added to the global picture of the Arab woman. In 2014, Knowledge@Wharton published a ground-breaking book on just such women. A chance trip to Dubai and Abu Dhabi in January provided me the opportunity to meet another tranche of these trailblazers – the women entrepreneurs who have used global digital platforms to drive transformational enterprise of their own. In many ways, the internet has empowered women in ways that go beyond education and the ability to organize socially – they are recruiting, developing products, communicating across global markets, fundraising and delivering services in ways that transcend conventional barriers. Without an exception, these are business leaders who also aspire to social impact – as individuals as well as for societies around them.

One of the young digital entrepreneurs who melds a social impetus into her commercial vision is LouLou Khazen.

Below is the article that ran in Knowledge@Wharton.

The Internet has empowered many Arab women entrepreneurs to transcend educational and other conventional barriers — they are recruiting, developing products, communicating across global markets, fundraising and delivering new services in growing numbers.

Loulou Khazen Baz is one of these digital entrepreneurs. In 2012, Khazen Baz’s online job market — Nabbesh.com — went live. Nabbesh (which means “search” in Arabic) is the Arab world’s first online employment marketplace. Founded in Dubai, UAE, it aims “to address the Arab World’s unemployment challenges by virtually connecting expert regional talent with flexible work, online jobs and opportunities to work from home.”

In a region where talent faces significant barriers — travel constraints, safety issues, social limitations and a dearth of job opportunities — Nabbesh allows companies to micro-source critical capabilities from across the Middle East and North Africa region. The drivers of Nabbesh’s business are similar to those of firms like elance.com and guru.com, which deliver the same type of services in the U.S.: The opportunity to source expertise flexibly, affordably and especially around projects that need point-in-time work with little face-to-face contact. Add to that factors such as the region’s high unemployment rates and political issues that cause severe economic distress, and Nabbesh.com could be viewed as serving a social and humanitarian purpose as well.

Learn more.

Khazen Baz launched Nabbesh through a combination of strategic capability, vision and some serendipity. Her presentation of the concept behind Nabbesh won her 1 million dirhams (around US$272,000) in the inaugural season of the reality TV show, The Entrepreneur. That “lucky break” plus her savings from over a decade got her started.

In a region where talent faces significant barriers, Nabbesh allows companies to micro-source critical capabilities from across the Middle East and North Africa region.

That year, Khazen Baz had just left ActiveM, a VC firm where she mentored and helped launch a series of start-ups. Like many of her entrepreneurial peers, she had held a series of corporate roles that benefitted her growth, but left her feeling like there was more to a career than a slow climb up the corporate ladder.

Khazen Baz’s strong aspirations are rooted in her childhood and education. Since her early years in Broumanna, Lebanon, she has been a driven activist of sorts. While she herself doesn’t remember specific incidents, her mother insists that she never eased up on her assertion that she had a right to equality with her two brothers. It may have helped that they were 10 and 11 years older than her, respectively; as the baby of the family, she ended up having more freedom than many of her classmates and friends. However, she remembers being angered by the differentiation in treatment that she perceived around her. “It’s almost as if less [was] expected of us [girls],” she says.

Completing her bachelor’s degree in hospitality in Australia proved a truly transformative experience. She remembers being in awe of a university system where people talked to professors like they were almost peers – using their names, rather than honorifics.

Returning home, though, Khazen Baz found that opportunities were scarce. This drove her decision to move to Dubai in 2003 — a common choice among female entrepreneurs — where she started as a project manager at DaimlerChrysler Financial Services. A few years later, she moved to a real estate firm, where she sharpened her management skills. “From simple approvals to complicated implementation strategy, she always found a way to juggle her company’s best interest and ours at the same time,” notes one of the contractors who worked with her while she was at Dubai Properties. “Loulou has a natural energy that is translated into every little e-mail and every long conversation, given she is excited and believes in what she is working on. Once you see her in action during the early stages of a brand launch or the last-second stage of a campaign launch, you’ll be surprised at the kind of pressure she can take, and she manages to do so with a smile.”

The Dubai ecosystem, with a common set of experiences and social venues that draw young professionals, helped Khazen Baz build a strong network. She continued to develop that network when she transitioned to working with founding partner Salam Saadeh in creating ActiveM, which offers management, financial advisory and consultancy services to early-stage companies and small to medium-size enterprises. While there, Khazen Baz was introduced to entrepreneurship firsthand. She also became excited about the prospect of building an organization with real social impact.

Khazen Baz’s experience across multiple geographies has been an asset in building her enterprise.

Too Few Opportunities

Khazen Baz’s own experiences had shown her that there were few opportunities for talented young people in many Middle Eastern and North African countries, and she became convinced that she needed to address the gaps in the employment marketplace. Social and political unrest had blighted businesses, and certainly limited the number of high-tech companies that could employ the young people who often graduated with technical degrees from regional and international graduate schools. In addition, the needs for technical skills in established businesses were variable, since the general level of tech adoption was slower, and companies did not generally build out large internal teams. This made it possible for Khazen Baz to start crafting a series of corporate partnerships that would be natural clients for the talent represented on Nabbesh.

Given the status quo — a market that had never seen such a platform, and where the “single employer” model of people staying with one company from their first post-college hire to retirement was common — Nabbesh’s success is striking. The site currently has 61,523 members, and 8,176 freelance jobs posted. Historically, more than 40% of the jobs posted and filled on the site have been creative or design-oriented commissions. Business services and administrative support come in second at 23%. Its early successes were around translation gigs, as well as specific technical skills sets, such as programming for mobile platforms.

Among the site’s users, more than 62% are undergrads, 22% are graduates or some 85% have tertiary education. Khazen Baz isn’t surprised by this. “The opportunity is massive,” she says. “It’s a market of more than 20 million people across just five key markets — UAE at the forefront, followed by Saudi Arabia, which is the largest e-commerce player, followed by Egypt, Lebanon and Jordan.” Yet, Khazen Baz doesn’t plan to limit her options: In the future, Nabbesh.com may expand beyond the region.

According to Khazen Baz, success for Nabbesh also depends on an understanding the region’s complexities. The Gulf Cooperation Council (GCC), which comprises Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE, is distinct from North Africa (Egypt, Tunisia, Algeria, etc.) and the Levant (Syria, Lebanon and Jordan). Each hosts different types of skills and business partners. Khazen Baz’s experience across multiple geographies has been an asset in building her enterprise.

Framing the potential of her start-up beyond the borders of the Gulf Cooperation Council was part of the success story.

Framing the potential of her start-up beyond the borders of the GCC was part of the success story — conventionally, businesses see themselves within the framework of the five countries, but in reality, the region’s online platforms can, and should, target all 22 nations of the Arab world, since they have common characteristics that can be leveraged: language and social mores, for example. This expands the potential reach of such platforms to more than 400 million people.

Looking for Capital

One challenge that Arab women entrepreneurs often have is hiring technical talent. However, Khazen Baz has benefited from having a wide network, especially given her previous role at ActiveM. She now runs a nine-person team supported by more than 10 freelance experts, and is looking forward to expanding.

A more significant hurdle, she says, is limited access to capital. The investment community in the Arab world is relatively immature when it comes to understanding and valuing digital and online business concepts and platforms. Additionally, more traditional real estate and infrastructure investments involve ingrained expectations and metrics that don’t translate well into the more agile, pivot-oriented world of online businesses, where communities and click-through rates are the most tangible markers of success. This has given rise to a series of interesting VC firms and incubators, but many are seen to be taking larger equity stakes for their investment and support than their Western counterparts. “They’re certainly getting their pound of flesh,” Khazen Baz notes.