Tuesday, August 4, 2009

trek down rainbow street

Rainbow street provides a small glimps into reform efforts in Amman. Located in Jabal Amman (Mount Amman) off of the first circle, this is one of the oldest streets in the city. A few years ago the city decided to revitalize the street, creating a hip hangout destination catering to people of all ages while preserving the traditional style. Several outlooks offer beautiful views of old Amman. Cafe Jarra has a photo gallery showcasing the Country's history and monarchy. Art galleries, cafes and bookshops abound. Here is a quick picture tour of the area:

The historic Rainbow Cinema after which the street is named:


Beautiful view of Old Amman from Old View Cafe at the bottom of Rainbow Street:


The Jordan River Foundation. This non-profit employs poor Jordanian women to craft beautiful textiles and homegoods created by expert designers. This showroom is also its flagship store. (http://www.jordanriver.jo/)


Books@ Cafe is an area staple, popular well before the Rainbow Street development project. It's a relaxed coffee shop, book shop, lounge. Said to be owned by an openly gay man, it also tends to be a trendy gay hangout.

Books@ wall art:

Souq Jara is an all day Friday market, fair and concert (in the evening).


Souq Jara welcomes an eclectic mix of people and crafts:

The Souq is also home to youth creativity:


Wild Jordan can be found off of Rainbow Street at the very end of Souq Jara. It's a Wild Nature Preservation Foundation, shop and healthy eating restaurant.


Nightime view of Amman from Wild Jordan's dining terrace:

Sunday, August 2, 2009

hope for venture in jordan

Last week I met with a venture capital fund that gave me hope for the prospects of venture in Jordan and the region more broadly: Accelerator Technology Holdings (ATH). First met with their associate, a young Duke graduate named Khaled Talhouni. Khaled is extremely bright and modest, and after only two years in the industry extremely well-versed in VC industry practice. I also met with the Fund's founder and CEO, Dr. Fawaz Zu'bi. Fawaz Zu'bi is warm, charismatic, articulate and genuine. He's the type to not forget a face or a name; they type to make you feel like you are the most important thing in the room when he is speaking to you.

In addition to generating attractive returns, ATH's mission is to advance the economic development of Jordan and the region by providing venture capital financing to early and growth stage technology, media and communications companies.

ATH was able to overcome the chicken and egg problem of raising venture financing: can't raise a fund because there's no track record and can't build a track record because there's no fund, due to Dr. Fawaz's strong network and track record as Minister of Information and Communication Technology and Minister of Administrative Development for Jordan. Thus, ATH actually has a fund of capital out of which to invest.

While the Fund doesn't currently face challenges on the investor front, it does face challenges on the investment front. Entrepreneurs in the region don't really understand venture terms. They often have inflated valuation expectations, little desire for succession planning and exit planning. Companies typically require a lot of hand holding during the investment period. And even if entrepreneurs want to plan for exit, exit opportunities themselves are scarce.

This makes me think: should entrepreneurs in the Arab World conform to Western venture standards, or should investors conform to the standards of entrepreneurs in the Arab World? I believe the answer is not straightforward. While I promised myself I would be cautious about taking the western model of venture capital that I believe in and applying it blindly to the Middle East, there are some things about it that I think should be applied. After all, investing in early stage ventures is a very risky business. If the formula doesn't allow for venture capitalists to have some degree of control and to work towards an exit that enables them to generate commensurate returns, investing becomes a fool's errand.

Venture capital can be very good for the entrepreneur. It creates access to capital that may otherwise not be there. The capital comes with years of experience growing profitable businesses and rich networks that lead to partnerships and customer relationships. At it's best, venture is a win-win situation that builds companies, creates jobs and promotes economic development.

However, investors in the Arab World are to a certain extent conforming to fit the regional circumstances. For example, if there is a lack of exit opportunities, investors can structure ongoing dividend payouts as a means of extracting return. If entrepreneurs are less seasoned in operations, investors are involved in a more hands-on way. If entrepreneurs are uneasy about minority control provisions, investors will require majority ownership stakes.

What I like about ATH is that they understand both the western model of venture and the local entrepreneurial culture very well. They are treading a line between both. They are adjusting their model to conform to the local entrepreneurial climate, yet they maintain high quality standards for the entrepreneurs in which they invest. It's a give and take. Slowly ATH, and firms like ATH (I mentioned the newly forming Middle East Venture Partners in a prior post), will change the entrepreneurial culture for the better. And the entrepreneurs will also force venture capitalists to adjust their model slightly to better fit the local culture.

With more firms like ATH who are nimble, have a willingness for flexibility, and strong drive to advance the economic development of the region, I think a venture industry can eventually flourish here.

Thursday, July 30, 2009

best party city?

Just a quick post to share a CNN news piece from yesterday.... and a bit of validation of my writings on Beirut as a party city:



In the event the video isn't loading properly, check it out on CNN's Site.

(Courtesy of my facebook friends Zeina and Fadi who were quick to post this!)

Wednesday, July 29, 2009

what type of company do venture capitalists fund?

A few weeks ago I was introduced by my friend Sami Shalabi to the ArabCrunch blogger Gaith Saqer. I met with him at Illy's coffee shop off of Rainbow Street. Over a coffee, he proceeded to tell me all about the entrepreneurial climate in the region, new gadgets on the market, and regional events he helped organize. This guy has his fingers on the pulse of technology and entrepreneurship initiatives in the region and reports on them at Arab Crunch. He invited me to guest author a post on his blog, and I readily accepted. Here it is. I hope you enjoy it:
What Type of Company do Venture Capitalists Fund?.

Tuesday, July 28, 2009

nascent venture industry

I've been meeting with various capital providers in Jordan and also speaking with some in other parts of the region. My primary role with Endeavor is to discover, profile and establish relationships with these capital providers. The hope is that they volunteer their time as VentureCorps Mentors for our Endeavor Entrepreneurs and that they can potentially be providers of capital to the entrepreneurs who need it. In exchange they get unfettered access to entrepreneurs who have been through a rigorous 5-stage selection process and could be great investment opportunities, as well as access to the Endeavor network and events.

By now I think I know every venture capital firm in Jordan. I've met with most of them and will be meeting with the rest this week or next. I've also met with several funds outside of Jordan and know of most of the rest. As such, I can say from experience, the venture industry in the region is nascent at best.

First, many "funds" aren't actually funds. That is, they actually don't have any money. People typically start venture advisory practices, providing fee-for-consulting services to entrepreneurs, in order to earn a living while they try to raise capital. Oftentimes investors aren't used venture terms and time horizons. They don't want to tie up their capital in a fund. Or they don't have the appetite for venture risk. Thus, often these firms are unable to raise capital so they continue operating as an advisory business. If an investment opportunity arises, they pool their network to see if they can find investors.

Second, even the firms who actually have capital and are structured as a venture fund typically find that it is extremely difficult to operate as a venture capitalist. Now the problem has to do with the entrepreneurs themselves. Entrepreneurs in the region simply lack an understanding of venture capital terms. They are unable to grasp concepts like right of first refusal, drag along provisions, preferred stock, participating features, veto rights, etc. Further, their "advisors" don't seem to be properly preparing them for these types of discussions; perhaps because the advisors themselves aren't fully versed in this language.

Third, there are some Islamic funds which follow shari'a law. Essentially, all this means is that the companies in which they invest cannot engage in certain unallowable activities that involve: gambling, alcohol, and charging or paying interest. It also means the fund itself can't structure securities that have debt characteristics. The existence of such funds is good since they provide an alternative for entrepreneurs who prefer to seek Shari'a compliant funding. However, for other entrepreneurs, they can mean a longer vetting process with unecessary restrictions. Additionally, venture capitalists often incorporate debt-like characteristics in their securities as a way of lessening the downside risk. So, to the extent Islamic funds cannot afford themselves this flexibility, they might involve themselves in a riskier type of investing than other venture funds.

This leads me to believe that while initiatives such as the Queen Rania Center for Entrepreneurship (QRCE) are quite admirable, there is still a long way to go. Largely, government initiatives are encouraging very early stage entrepreneurship. They are teaching Jordan's educated how to venture out on their own and build a real business. For example, I attended a very well-run and well attended QRCE seminar yesterday on Blue Ocean Strategy. The presenter was knowledgable, the audience engaged. Interestingly, I estimate the audience was 30%-40% women, and the women were much more vocal and interactive than the men. While these early stage initiatives are necessary, they are not sufficient. Further effort is needed to help entrepreneurs move beyond the early stage and build an environment where they have access to customers, partners and investors.

There is a role for an organization like Endeavor, which is focused on more established entrepreneurs who can employ many people and serve as role models for other aspiring entrepreneurs. Endeavor's high profile local board and VentureCorp gives it clout in the region. It can engage with the few true venture funds, verse its entrepreneurs in venture language and educate them on the benefits of VC. It can then hold up these transactions as successful examples for others to follow - both budding entrepreneurs and budding investors.

Additionally, more needs to be done on the policy side: to encourage venture investing, to headquarter more established businesses to the region as a way of creating an entrenched base of potential partners and acquirers for younger companies, and to ease registration and tax filing requirements for existing businesses.

Already, Jordanians who have built themselves a career in the West are returning to Jordan to give back to society. Ennis Rimawi of Catalyst PE returned a few years ago from Boston and Mohammed Alzubi of Middle East Venture Partners just returned from Silicon Valley. He informs me all of his belongings are in a crate somewhere in the middle of the ocean (not quite sure which ocean). People return full of hope and excitement, often to be disappointed by the challenges of reality on the ground. However, with a bit of friendly government policy, initiatives like the QRCE and the El-Hassan Science City, and organizations like Endeavor trying to guide constituents in the right direction, the Ennises and Mohammeds of Jordan might find some success here after all.

Saturday, July 25, 2009

an adventure trip and the tourism industry



Prior to departing for my mid-summer travels, I went on an incredible day trip just a 45 minute drive outside of Amman. The day started at 10am with a drive out to Wadi Mujib, a canyon and nature reserve southeast of Amman. Wadi Mujib offers several trails, including a two-hour guided rock-climbing trail, a seven-hour combination adventure trail, and a three-hour waterfall hiking trail. We did the latter, and it was quite an adventure. We had to forge against rapids, often using previously set ropes for support. We climbed up smaller falls along the way and sometimes leaped from one slippery rock to another, hopeful not to slip and fall into the fast-moving rapids below. The hike was challenging and rewarding, both because of the physical struggle and the lovely waterfall greeting us at the end. At several points I thought I would have to quit and head back, but I’m very happy I stuck through it. It’s unlikely I would have made it without the help of the guys who were with me.







After the hike we took a 15-minute drive to the Movenpik hotel resort at the Dead Sea and enjoyed a relaxing afternoon by the infinity pool, a therapeutic dip in the dead sea and a full body natural dead sea mud mask. We ended the day with a drive to the cliffs to watch the sunset before heading back to Amman for a chicken shawarma dinner and a good night’s sleep.





The trip got me thinking about the state of the tourism industry in Jordan. The breadth and depth of tourist attractions in Jordan are quite remarkable, particularly considering how much of the Country is dry dessert land. Wadi Mujib is one of many wadis and not even among the more popular sites in Jordan. The country is full of rich history. However despite recent efforts by the monarchy, Jordan has failed to really capitalize on the potential of a tourism industry here.


The sites are too many to list, but I'll cover all of the main highlights:

  • Petra is the ancient city of the Nabateans, entirely carved into the mountains, complete with sewege and drainage systems. Petra, well-known to Westerners as the famous setting of Indiana Jones and the Last Crusade, is one of the new 7 wonders of the world. Carved into beautiful pink rock, this vast hidden city was discovered by Swiss explorer Johann Ludwig Burckhardt. Petra has something to offer to everyone - an active hike up to the monastary, rock climbing trails for the more adventurous, and horse or donkey rides for the less mobile.

  • Wadi Rum is a desert full of mountains and hills. It's a popular place to go camping with the bedouins who will make dinner and coffee for you. It's also popular for a variety of sports and rock climbing.

  • Natural reserves like Wadi Mujib: Dana, Azraq Wetland and Shawmari. However, Wadi Mujib is distinct in being the lowest nature reserve in the world, and also the one with the most adventures to offer.

  • Roman ruins: Umm Qais is an ancient roman city that boasts a gorgeous view of the Golan Heights. Jerash is another ancient roman city in the North famous for its beautiful old roman architecture. Jerash is also home to the annual Jerash Music and Arts Festival.

  • Castles: Ajlun - with the famous Islamic Al Rabadh castle, and Karak from the times of Salah Al Din.

  • Amman itself offers the Roman Theater, various museums, lots of arts, and the dead sea scrolls.

  • Hamamat Ma'een - hot springs about 30 minutes outside of Amman.

  • Religious sites: The floor mosaic map of the early Byzantine St. George's Church in Madaba; Mt. Nebo where Moses was said to have viewed the promised land; and the Jordan River where Jesus Christ was babptised by John the Baptist.

  • Water: The Dead Sea, the lowest point on earth, has been developed with beautiful resorts. And Aqaba, at the Red Sea, has gorgeous coral reefs that are the best I've seen for snorkling and diving.


  • I'm very lucky to have done everything on the list above except for Wadi Rum, Karak and some of the museums. Though I did most of it nine years ago when I studied Arabic in Jordan for a summer.

    The monarchy is making a concerted effort to promote Jordan as a tourist destination. King Abdallah even created a promotional video of himself braving the Wadi Mujib trails! Places like the Dead Sea, Maeen Hot Springs and the Red Sea are much more developed than when I last visited 9 years ago.

    Additionally, some interesting entrepreneurs have decided to leverage Jordan's natural sites in building their companies. For example, one of the companies incubated at the El-Hassan Science City provides electronic tour guides of many of the sites in over 20 languages. As another example, Endeavor Jordan recently met with a company that offers corporate retreats and team building programs. The company holds its programs all over the country at some of the sites mentioned above. It is also building for itself an adventure tourism niche, as it charts brand new adventure courses in previously uncharted territory!

    I'm not sure why Jordan's tourism industry hasn't boomed. At this point, I view Jordan as a true diamond in the rough in terms of a tourist destination. Perhaps people are afraid of the region (though I find it incredibly safe here). Perhaps the government needs to step up its promotion efforts even further. Perhaps its up to the private sector to advertise all that Jordan has to offer. Either way, I think Jordan will be one of the next up and coming tourist destinations.

    Wednesday, July 22, 2009

    a real arab city

    I took a 24-hour detour to Damascus (Al Sham as the Arabs call it), and I was blown away. Admittedly, I had never been to Sham and didn't know much about the City. Further, when I would mention to a Lebanese person that I was going to Sham, the typical response was, with nose up in the air and a downward lip curl, "Oh...why do you want to go there?" as if it's a desolate backwards place that the refined Lebanese do not visit.

    Thus, to my surprise, Sham is simply amazing. It's a beautiful, clean city that is full of life and so much history. What I liked most is that people are genuine; truly genuine in the full sense of the word. In Beirut and Amman everyone wants to be "Western." It's as if they work hard to deny their heritage in order to be what they perceive as something "better" - more American or European. In Sham, this is not the case. People are true to who they are and proud to be Syrian. They are also generally well-educated, friendly, pleasant; simply top-class.


    (From top left, clockwise) Our hotel courtyard, Old City, Ummayad Mosque, Old City Souq

    Sham is what I dream a real Arab city should be. Full of beautiful architecture that tells its rich history, respectful of its heritage; yet modern, intellectual and comfortable. The University of Damascus, with over 85,000 students, is at the heart of the City. Society is very open. People from a mix of religions coexist and collaborate daily.

    With so little time, I didn't have a chance to experience its nightlife. But a close friend who was visiting at the same time stayed a couple of extra days and partied with a Syrian friend, the Syrian way. When he went home at 4am, his friends were still going strong. He explained it as the most fun he had during his entire trek through the Arab World. Fun clubs, great music, reasonably-priced alcohol, approachable people. And the girls.... Compared to the often harsh glamour of Lebanon, the girls have a delicate natural beauty. They seem less preoccupied with their appearance and more interested with the quality of conversation.

    The food is also amazing. I believe the Syrian kitchen is unparalleled in the Arab World. Some of my Palestinian and Lebanese friends may beg to differ, but as a Palestinian myself, I think the Syrian kitchen is #1. I'll share with you one of the Syrian delicacies "Habara Neye" (raw meat). The pictures from left to right show the progression from serving plate presentation, to composed on my plate, to fully eaten - all in under 5 minutes. Yum!


    In all, this is definitely a place I want to return to and experience more fully. As harsh as this may sound, I think Damascus puts the rest of the Arab world to shame.