We’ll Build This City…On Staaarrrtttuuppps!

A very relevant article that was recommended to me was Paul Graham‘s article from Feb ’09: “Can You Buy a Silicon Valley? Maybe.”

I won’t steal too much of the thunder from reading the article for yourself, but the key point is that you could short-circuit the long development process to create a replica of Silicon Valley. Given the money it could be done.

Dubai and the rest of the GCC are great examples of franchise cultures. Rather than wait and build local brands in retail, commercial, education and manufacturing, it has been licensed from abroad. Much of the local wealth has been built by Emiratis serving as the local vendor of foreign brands. The local 51% partner of any major international brand: Toyota, McDonald’s, Sony, etc is without doubt a wildly-diversified family-run conglomerate. We are no strangers to importing best-of-breed here.

Dubai actually has many of the required elements of a great startup ecosystem:

• capital
• good weather
• tax-free
• metropolitan not suburban city
• livable
• safe
• global tech players with local presence
• international, migrant workforce
• entrepreneurial spirit

What we lack is unfortunately vital, but not insurmountable:

• ease of setting-up a business
• low-cost of setting-up a business
• strong research-based university
• innovation and IP development
• more robust insolvency laws

In Paul Graham’s model, rather than try to grow local entrepreneurs without an ecosystem or legacy, Dubai could headhunt startups. We create the local framework where entrepreneurs can start and grow businesses without local partners or being restricted to a free zone. Give them flexibilty. Then local capital finds startups “at the point in their life when they naturally take root” PG so they are less inclined to leave, and

“select startups by piggybacking on the expertise of investors who weren’t local. It would be pretty straightforward to make a list of the most eminent Silicon Valley angels and from that to generate a list of all the startups they’d invested in. If a city offered these companies a million dollars each to move, a lot of the earlier stage ones would probably take it.” PG

As a corporate VC based in Dubai, if I could travel to Y Combinator, TechCrunch50 or headhunt startups funded by prominent angels, offer them money to move here – not just a sales and marketing office – then I could really help build an ecosystem. The startups would attract developers and media. They would inspire younger local entrepreneurs. They would generate real local thought leadership. They would infuse the local economy with high-value jobs and innovation. They would put Dubai on the map and make attracting additional tech startups, and seeing actual local IP a real possibility. As of now, DemoCamps here are like leap years.

The problem: without bankruptcy laws then failing founders will be forced to flee, and without the flexibility to setup anywhere in town without a local partner, and without the flexibility to be choose an office and thereby put downward pressure on office rents, this won’t happen.

Related: Startup Visa Dubai

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