Jordan’s new generation of web ventures is on the cover of Venture magazine this month. The issue asks, somewhat skeptically perhaps, “More than a Bubble?”. The story, written by Venture journalist Adam Lichtenheld, features our very own Ikbis as well as D1G, 3alarasi and Mecca.com, focusing on the post-Maktoob web ventures which appeared in the last couple of years. It also features an investors’ view as represented my Emile Cubeisy of IV Holding who, in the past couple of years, made investments into an earlier Jordanian web venture Jeeran.com and a new one: ShooFeeTV
But the “more than a bubble” question which titles this story might be somewhat misleading. It may be projecting the notion of a ‘bubble’ to a field not exactly experiencing a bubble. Yes, there may have been a ‘web 2.0 bubble’ in the US in the past few years, with an endless array of companies started up, funded (then acquired by Google or Yahoo), to address a million little market niches. The epitome of the web 2.0 bubble in the US was reached with the billion dollar acquisitions of YouTube by Google and Skype by Ebay.
But what “bubble” can we speak of in the Arab region? Wher are the dozens of startups and where are the big investment stories?
If anything has been bubbling in the Arab world in the past half a decade then it was the real estate and retail sectors. Even in a “poor” country like Jordan we’ve seen malls and skyscrapers being build, fueled by petrodollars. That’s what investors in this part of the world like: buildings and shopping.
The article (and Mr Cubeisy’s) legitimately ask the question: are these new web ventures adding anything new or are they merely a copy of western models. And, given the low barrier to entry for establishing a web venture these days, do the featured companies offer a defensible competitive advantage?
These are good questions, for sure. But it fails to address the role of investors in driving innovation. A web venture, despite the relatively low cost of starting up and operating, is still a business that needs to survive. Once angel/family and friends funding has been spent on developing a platform, revenue has to start materializing quickly. The focus of the entrepreneurs is shifted from disruptive product development to actually attracting paying customers, which most of the time means dealing with advertising agencies in a market that still does not really believe in online advertising. Innovation often has to take back seat. Looking at successful western models becomes the less risky strategy.
Arab investors have not exactly been pouring money onto web ventures (they’ve been busy pouring concrete). Expecting Jordan’s web ventures to be crazily innovative in such an environment (which also includes low internet penetration rates across the region) is a bit too much to ask for.
When we launched Ikbis.com, Newsweek called us the YouTube of the Arab world. This was a great way for us to explain ourselves to clients and potential partners. We’re now innovating, as much as we sensibly can, to move away from an “XYZ of the Arab world” position and injecting more relevancy to the Arab user into Ikbis.
In Jordan in particular there is a good basis from which Arab web ventures can start. But more aggressive and forthcoming investors are needed to help fuel the growth of the web sector. On the other hand, the big business players in the local market need to start advertising online instead of spending all their money on billboards and newspaper ads. It actually makes sense for them to do so from a pure cost saving point of view and it would help the next generation of web ventures in their home market.
Despite the premature talk of a “bubble”, Venture’s article is a good introduction and overview of what’s happening web-wise in the Kingdom and I hope it will help bring more attention to a growth area which can prove to be an important part of the Jordan’s tech sector.
Read these related posts on 360east:
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- Newsweek: Ikbis is the YouTube of the Arab world
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