We take some words of advice from Flat6Labs Cairo, who has a lot planned for the sixth edition of MENA’s most anticipated entrepreneurial summit, taking place between the 7th and 9th of December at the Greek Campus.
As is customary, RiseUp has spiraled a jolt of hustle and bustle in the ecosystem that got everyone caught up with their events, workshops, panel discussions, fireside chats, and – well – media coverage.
Flat6Labs Cairo has planned for many firsts this year, at the sixth edition of RiseUp Summit taking place at the Greek Campus from December 7thto the 9th. Throughout these days, Flat6Labs Cairo will set up a mini-accelerator where they’ll be offering on-demand coaching and mentoring; like a mockup of how an accelerator programme would work.
Whereas, as a satellite event with RiseUp, Flat6Labs Cairo is launching their 11th Cycle’s demo day on the first day of the summit at the Nile Ritz Carlton. What’s new about this demo day that it won’t be a typical pitch-and-listen-to-the-jury kind of demo day; after each pitch, all attendees will be able to interact with the pitching startups through an instant digital platform that will soon be announced.
“Also, at the demo day we’re hosting for the first time ever three of our startups from the regional Flat6Labs portfolio;” Flat6Labs Cairo’s Ramez El-Serafy tells Startup Scene. “We have one startup from Bahrain, one from Tunisia and one from Beirut and they will be featured on the stage.”
The next thing on Flat6Labs Cairo’s to-do list would be bringing the Global Accelerator Network (GAN) to RiseUp. GAN is a network with more than100 global accelerator programmes under its umbrella. El-Serafy has been part of GAN since 2012, as one of the longest standing members. This would mark the first time they’re visiting the MENA region and Flat6Labs Cairo invited them to come to the summit to both meet and educate incubators and accelerators.
“So, we’re hosting for the first time a very exclusive closed workshop focused on the standards of the accelerator industry where GAN’s CEO Patrick Riley with a couple of his team members will be giving sessions and talks to a group of accelerator managers to help them manage their programmes, monetise them, manage their mentoring network and other different aspects,” adds El-Serafy. This deep dive workshop, delving into accelerator management, will be held on the second day of RiseUp, December 8th.
Also for the first time, the entire regional team of Flat6Labs will fly from six countries to RiseUp, where they will also be attending the workshop GAN is giving.
After detailing his accelerator’s plans for RiseUp Summit 2018, El-Serafy walks us through five mistakes he has often found circulating through generations and generations of startups pitching to get incubated at Flat6Labs Cairo. If you’re considering applying for Flat6Labs Cairo’s 12th Cycle – or anywhere else – try to avoid these five common slip-ups.
"Many startups begin their pitch by saying they’re the first to think of specific idea and I don’t think that’s true, we’re in 2018," says El-Serafy. "Facebook was not the first social media network, Uber was not the first player in transportation. So it’s not about being the first, it’s more about how you’re doing it and your vision."
Doing your homework means that you have to study your market and how it works, you need to do a competition analysis. "You’d be very surprised how many startups try to apply or join Flat6Labs before they actually have fully analysed their competition and knowing exactly who’s out there," he says. "And it doesn’t cost much time and effort."
The CEO has seen some entrepreneurs say that they don’t have access to data, or that they don’t know where to start from. It is challenging, but doing some research and spending a couple of hours online to find similar products and using some simple things to do that is not as hard as assumed. So bottom-line, stop assuming and do your homework.
"We are not in Silicon Valley, so the whole concept of that we’ll start and gain one thousand or million users and then figure out our business model, unfortunately doesn’t happen in this part of the world," he says. If you are not validating your business model and designing it to make money, it will get very difficult. Some startups spend a lot of time developing a product without validating the business model. So, they can develop an outstanding application and launch it on the store, have thousands of free downloads in such a short time, without validating if any those downloaders would pay in the future.
Entrepreneurs must have a very clear business model. "By business model I don’t mean how they make money, it means how they actually operate their business, how they deal with the customers, how they deal with partners, what kind of offering, their pricing," he explains. "They really need to focus on the profitability and how they are selling their product in general; and you’ll be surprised again how many people overlook this part."
As for the market scalability, it has to do with where an entrepreneur is starting from; many startups would be saying they’re starting in Egypt and they’ll be expanding in the MENA region in three years. Flat6Labs Cairo's CEO begs to differ; it is not feasible. "You won’t find a startup in Europe expanding even if in one economic zone in two or three years," he backs up his rationale. Many Middle Eastern startups underestimate the region. "The MENA region is not that easy not that easy to scale, it’s actually difficult to build a team in a different country, you need the support, you need to capital to do that . So picking the market from the beginning and deciding where you want to be and expand is very important."
So, it’s completely fine to start from a small market and accelerators like Flat6Labs understand that there are some products that work for specific markets. "Yet, you have to have a clear idea of how you’ll be expanding in the market," he says. "And you need to have this connection with the market; you need to understand how you’ll be targeting and entering this market."
If today you are spending a thousand dollars to attract a thousand customers, tomorrow, how can you spend 10 thousand dollars to attract 100 thousand customers? This is what entrepreneurs should be thinking about when brainstorming ideas to create a more scalable business model...
It's very common that startups stick to a small market at the beginning or start by one or two buyers; and it's fine as long as it's only at the beginning. "But if you’re not thinking about your next milestone, it will be very tricky to grow your business and to be a multimillion dollar company one day and hopefully even a unicorn," El-Serafy says. "So, it’s important, and unfortunately many startups don’t do that from the beginning and they figure it out along the way."
So what startups need to figure out beforehand is how they can take their business to the next phase without spending too much money at a later stage. Think of how you can scale your team, your market, your operations, even your business models and attract different potential customers. The easy way is always tempting; it’s very easy to start and attract the first 100 family and friends who used the product but one must always remember to think ahead.
The ecosystem is a very friendly environment; full of friends and acquaintances. You might not realise how tight-knit it is until you step a foot in the Greek Campus for example and find this founder who used to go to the same school, or this mentor who was your Teacher Assistant in college. In consequence, accelerators and incubators often see startups make the mistake of their lives by not choosing logically; picking their teammates and co-founders based on their emotional proximity. So when El-Serafy asks them about how they're splitting roles and finances between them the response would be: We’ll figure that out later. "Yes, startups sound very nice at the beginning. But when it gets serious like when you start fundraising for your next big round, expanding your team and your operations, etc.. if you’re not on full agreement on these details with your partners ahead of time, it gets very tricky and very challenging to keep on and it causes a huge issue that usually tears startups apart."
This point in setting up your startup is the most crucial in El-Serafy's opinion. "So usually you have first the first four ones figured out; you can have a great idea, great market, great potential... But without a team believing in this idea, a team that has a little bit of experience in this industry or market, it’s going to be difficult to grow your business." So, how you know each other is very important. and it’s okay to work with friends as long as you make sure to have everything laid out in terms of how you’re working together, the commitments, responsibilities, the share structure of the company, the milestones that you want to reach. Even if not working with friends, you have to be figuring this out early on.
Apply before December 15th, click here.
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